Systemic risk assessment using complex networks approach: Evidence from the Brazilian (re)insurance market

In this paper, we assess the systemic risk of the Brazilian (re)insurance market using static and dynamic complex network approach, where the companies are connected to each other through co-insurance, reinsurance and retrocession transactions. We found that some local reinsurers and non-life insurers act as bridges connecting the local and international markets. Furthermore, the Brazilian (re)insurance market is robust to extreme scenarios of insolvency, although there are points of vulnerability: a few local reinsurers and non-life insurers. Finally, this study contributes to the creation of a stress testing framework that relies solely on publicly available data.