A snapshot of LatAm: GWP and ceded premiums in recent years

The lower  chart shows the absolute numbers and growth in gross written premiums (GWP) and ceded premiums for the whole of Latin America as a percentage. It also shows ceded premiums as a percentage of gross written premiums.

The strong, double-digit, growth numbers year-on-year in GWP 2021 (12%) 2022 (17%) and 2023 (18%) are largely driven by the hardening of property/casualty rates, higher life insurance premiums (driven by the COVID-19 pandemic) and currency fluctuations in some major markets including Mexico. Motor insurance rates also increased in some of these periods in the aftermath of the pandemic.

The drop in growth seen in the period 2023 to 2024 (6%) might be considered a normalisation in the aftermath of this period of higher growth levels. 

While the pace of growth of ceded premiums has flattened, it continues to see some increase.

The chart on the right illustrates the amount of ceded premium by country in Latin America. In absolute terms, insurers in Mexico buy the most reinsurance, followed by Brazil, Chile, Colombia, Peru and Argentina.

Of the $32 billion purchased in total in 2024, much of the differential here is driven by levels of cat exposure in different counties. Mexico, for example, has a far higher exposure to natural catastrophes than Brazil. Chile, Colombia and Peru also fall into this category. 

Cat losses in all these countries in recent years has also driven a broad increase in reinsurance buying. The numbers for Argentina are somewhat distorted due to currency fluctuations.

The third chart shows the levels of ceded premiums by line of business. Property/casualty is by far the largest because it requires the most capital to write (55% cession). It is followed by life, surety & credit lines (60% cession) and motor insurance.

The information here represents just a snapshot of the scale and shape of the Latin American insurance and reinsurance markets. Data was supplied by LatinoInsurance. For more detailed information visit: www.latinoinsurance.com

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