New entrants redefine LatAm’s reinsurance landscape

The Latin American re/insurance market is experiencing a wave of new entrants, in the form of insurers, reinsurers and service providers, with increased interest from global players. 

That was a major theme that emerged from a survey by Intelligent Insurer, ahead of Miami Reinsurance Week.

Of online respondents, 82 per cent noted a rise in global market engagement, citing opportunities in sectors such as catastrophe risk, specialty lines and infrastructure-related coverage.

Some 45 per cent are focused on growing market share in existing lines, while 18 per cent want to expand into new lines, with captive insurance often mentioned.

With both established players and new entrants reassessing their strategies, a significant shift is coming.

“Expanding into new lines requires not just capital but also deep local expertise,” commented a senior executive. “The market is competitive, but those who understand the nuances of regulation and risk pricing will have an advantage.”

This suggests a cautious but opportunistic approach to an  evolving risk landscape  in which market conditions remain challenging.

When asked about the largest barriers to expansion over the past 12 months, 55 per cent cited the dynamic around rates, terms and conditions, while 18 per cent pointed to macroeconomic volatility, indicating while demand for reinsurance solutions exists, pricing discipline and financial stability still remain crucial.

One participant noted: “The key challenge is balancing competitive pricing with sustainable profitability: misjudging risk pricing can have long-term consequences.”

Who’s making a move?

The survey also revealed while some companies are cautious, others see Latin America as a growth engine. 

A notable 37 per cent of respondents are actively considering forming new partnerships or joint ventures to facilitate entry into the region.

Heavyweights such as Everest and Charles Taylor have recently already opened offices in the continent with many more companies following.

“New entrants are often looking at niche areas like parametric insurance or specialty lines.

“These segments provide opportunities for differentiation without going head-to-head with larger, established players,” said one respondent.

Another highlighted the region’s potential: “With the hardening market globally, reinsurers are looking for diversification. 

“Latin America offers untapped potential, especially in underpenetrated markets such as agricultural insurance and cyber risk.”

Interest from global players

Rrespondents overwhelmingly reported an increase in international interest, often noting the need for diversification amid global economic fluctuations. 

One participant explained: “We’ve seen a rise in European and Asian reinsurers exploring opportunities in the region, driven by the need for non-traditional markets to sustain profitability as mature markets tighten.”"

The availability of new technologies and data analytics tools has also made underwriting in the region more viable, reducing concerns about market volatility and historical loss ratios.

Several factors are driving this trend, such as economic stabilisation: despite political uncertainties, many Latin American economies have shown resilience, attracting long-term investment. 

Digital transformation also drives increased adoption of data analytics and artificial intelligence to assess risk better.

Finally, new regulatory frameworks will help governments implement more structured environments that enhance investor confidence.

Challenges for new entrants

Despite the optimism, new entrants will face challenges, particularly in understanding local market dynamics. 

Regulatory complexities, geopolitical instability and a growing talent shortage remain hurdles, with worries about climate change, inflation and new entrants following closely behind, however the principal challenge cited was the dynamic around rates and terms and conditions.

A reinsurer with significant LatAm operations commented: “The key to success is patience.

 It’s a market with strong potential, but requires local expertise, long-term commitment and strategic alignment with regional players.”

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