Moody's on Aug. 8 revised its outlook for Brazilian insurers to stable from negative.

The outlook revision is due to an expected rise in premiums and stable profitability given better underwriting discipline, despite weak economic growth, Moody's said.

The weak economic environment has constrained the growth outlook for insurers, but the sector has expanded faster than the economy, Moody's Vice President-Analyst Diego Kashiwakura said in a statement. Low insurance market penetration means that the industry can expand further once macroeconomic conditions improve, he added.

The insurance sector can also benefit from the implementation of a pension reform and the recent introduction of the universal life product, Moody's said.