Miami edges London on LatAm risks

An explosion of large, complex infrastructure projects in Latin America is leading to more opportunities for reinsurers in the region – but such projects can also generate complex claims, something exacerbated by the remoteness of some projects and challenges around access, both physically and in terms of information. 

That is the view of Leonardo Garzon, senior vice-president of group operations, Latin America – McLarens. Speaking to Miami Reinsurance Week Today, Garzon said that as many as 30-40 reinsurers might be involved on the biggest and most complex risks, such as hydropower plants or renewable energy projects. Combine this with a challenging topography and other factors such as political risk, and claims can be difficult to easily assess. “These are big, complex, projects, but the rates reflect that. We often see now multi-billion-dollar infrastructure projects, road, rail, energy etc, or renewable energy projects being sanctioned. But they all need insurance – and that is presenting an opportunity here,” he said. 

Garzon has seen plenty of complex claims in his time. He has more than 25 years in the forensic engineering, construction and insurance industries, and extensive experience in evaluation, risk assessment, forensic investigation and remedial design for a variety of structures and infrastructure projects. He has worked closely with insurance and reinsurance companies and independent loss adjusters in high-value disputes, evaluated the scope and nature of losses, review construction schedules and provided pre-loss risk assessments. 

He is also a long-time veteran of the Miami Reinsurance Week. In the context of managing big risks such as these, he said there has been a trend over the past decade towards more risks being placed in Miami – as opposed to London, though he acknowledges that carriers from both markets are typically present on parge placements. “The Miami market has grown. There are plenty of decision- makers here now – that has definitely taken a share of what used to go to London.” 

In terms of the markets offering the greatest prospects for growth, he names the usual suspects of Brazil, Mexico, Peru and Colombia, which boast either natural resources or investment in infrastructure projects – all needing insuring. But he also predicts Argentina will come back to the fore. “People have been wary due to the inflation in the country, but there is an abundance of natural resources there and people are queuing up to invest, if stability returns.

” McLarens now has approximately 160 people in Latin America, operating from seven countries. In addition to eyeing growth potential in certain countries, Garzon also believes it has an opportunity to grow the services it offers in the region. In particular, he believes that forensic accounting, forensic engineering and building and consultancy services will increasingly be in demand.

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