When U.S. insurance company Assurant first entered the Brazilian market in 2002, the company immediately encountered a number of tough business challenges. Most significantly, Assurant faced competition from regional insurers who had well-established brand recognition and competitive rates based on years of experience in the country's insurance market.

Initially, Assurant used historical data from U.S. customers to help determine pricing and reserve rates in Brazil, but this strategy yielded overpriced products and services. Fortunately, the company began to gather data as it slowly acquired customers and later obtained a database of regional customer information when it bought out a local competitor.

Almost immediately, Assurant analysts began looking for a data analysis solution to help derive benefits from the new data. They found their solution in SAS.

"We used SAS to study this database and compare it with the rates we were charging to see whether we were effectively working with a correct rate - or if there would be a better Brazilian rate," explains Marcello Gonçalves, president of Assurant Brazil.

In fact, Assurant executives learned, both the company's rates and its stockpile of cash reserves could be significantly reduced. "The first actuarial evaluation that we did showed that we were able to reduce rates by up to 70 percent in some markets," says Gonçalves.

SAS understands tough marketplace
In Brazil, Assurant works in two market niches, providing payment protection insurance and extended service contracts. Both services are sold through third-party banks and retailers instead of directly to customers by Assurant.

The payment protection programs are available through credit card lenders and other credit lenders. These insurance agreements offer to waive interest or monthly payments in the event of disability, unemployment or family leave.

The supplemental or extended warranty and service programs are available when purchasing consumer electronics, home appliances and motor vehicles. Assurant's products in this category are offered by retailers, utilities and auto dealers.

Assurant provides customers with insurance that protects their purchases, and the service offers retail clients risk transfer, full warranty administration, compliance administration, technical product support, point-of-sale marketing support, after-market marketing and Internet marketing integration.

According to Gonçalves, the extended warranty market is a mature one with well-established competitors, but the supplemental insurance market in Brazil is reasonably unexploited.

"This market has been growing a lot in Brazil in the last five to six years, and we believe it will grow a lot more with the participation of the banks in this market," Gonçalves says.

SAS fulfills requirements and more
According to Gonçalves, SAS has provided Assurant with a risk management solution that helps his company perform actuarial analysis, evaluate risk and set rates that make it more competitive in the marketplace.

"I have no doubt that we're much more competitive now. Look at the number of clients we've gained after reviewing our rates as compared to what we had before. The difference is substantial," Gonçalves says.

Plus, Gonçalves explains that SAS has improved the company's data quality and provided the most scalable solution on the market. "We needed an analytical solution that could manage a large database with no constraints in terms of size," he says. "We needed a scalable solution that could grow as Assurant grows and could talk with the other systems we have, so that information can be consolidated very quickly. SAS was undoubtedly the best solution. It fulfilled all of our requirements for actuarial evaluation - and more."

Solution benefits partners and customers
Overall, Gonçalves says SAS supports Assurant as a key risk management partner. "The support from SAS has always been excellent. We've received in-depth knowledge of our insured customer base and an understanding of the events or factors that may influence our claim rate."

Currently, Assurant is sharing its SAS results internally with executives and other decision makers. But soon, it plans to share the data with banking and retail partners as well. "We're still only experiencing the early benefits with SAS," says Gonçalves. "We also plan to disseminate information to our clients about their customers. So, if I have 100,000 customers with a particular bank, I can provide that bank with information about those 100,000 clients."

This type of information-sharing will help generate more business opportunities for both Assurant and its banking and retail partners. "I can talk about the behavior of my clients' customers within our universe. I can talk about their purchase behaviors, their unemployment behaviors and their breakdown behaviors. My competitor cannot do that, so it makes me even more competitive," Gonçalves says.

Most importantly, says Gonçalves, the SAS solution benefits the customers who purchase insurance from Assurant. After all, customers are the main beneficiaries of better rates. "Today I can offer less expensive products while still protecting my clients and protecting my reserves," he says. "With SAS, our clients are seeing much better rates compared to just six or seven months ago."