Stability amid change: why reinsurance is crucial in LatAm

Latin America is experiencing a period of rapid change in its risk landscape, due to shifts in risk profiles from natural disasters, economic volatility and changing demographics. But this makes partnerships with reinsurers more crucial than ever and can offer stability in a time of change. 

That is the view of Ariel Couto, CEO of MDS Brasil, the subsidiary of Ardonagh-owned MDS Group. Speaking to Miami Reinsurance Week Today, he suggested this has been a strong theme of the meetings and events he has attended during the week.

“The role of reinsurance in providing stability within our rapidly changing environment deserves attention,” he said. “Collaboration and innovation are vital to navigating these challenges. We must leverage the expertise of international reinsurers not only to mitigate risks but also to promote sustainable growth in our markets.”

He added that in an industry built on relationships, parting in this way and sharing expertise benefits everyone.

“By fostering a strong partnership between local and international players, we can enhance our resilience, broaden coverage options and ultimately better serve our policyholders.”

He added that such discussions will be complemented by the ethos of the market sharing insights and best practice in technology adoption, while also debating and tackling issues such as climate change and regulatory changes. 

“Attending Miami Reinsurance Week is always a rich experience. I anticipate several key topics will dominate our discussions, particularly focusing on the increasing impact of climate change on insurance models, the integration of technology and data analytics in underwriting and claims processes, and the evolving regulatory landscape that influences both regional and global markets. 

'We maintain a constant dialog with regulators and stakeholders to anticipate and adapt our strategies to new guidelines.'

“This can pave the way for more efficient processes and improved customer experiences,” he said. “It’s essential that we engage in open dialogue during this event, collectively devising strategies that can benefit all stakeholders in the industry.”

Innovate to stay ahead

But overcoming some of the deepest challenges facing the market also requires a considered response internally. He acknowledges that macroeconomic factors such as inflation, regulatory developments, and geopolitical risks, all impact the Brazilian insurance and reinsurance markets – and firms must innovate to stay ahead of such threats.

“Macroeconomic factors provide a challenging environment for the insurance and reinsurance markets in Brazil,” he said. “We are investing in innovation to improve our risk analysis and data management capabilities, enabling a more agile and informed response to market changes. In addition, we maintain a constant dialog with regulators and stakeholders to anticipate and adapt our strategies to new guidelines.”

He said this approach, which is focused on customised solutions and product diversification, also allows the company to better meet its clients' needs, minimising negative impacts and seizing growth opportunities in the process.

Underpinning this is its willingness to embrace advancements in technology and digital transformation. It has invested heavily in this space in recent years and is reaping the rewards.

“We are taking advantage of advances in technology and digital transformation to renew risk management and improve the solutions we offer our clients. We are investing in data analysis and artificial intelligence tools that allow us to identify patterns, predict risks and customise solutions according to the specific needs of each client,” he said.

In addition, he notes that the digitisation of internal processes has optimised operational efficiency, reducing response times and improving the customer experience. “We have implemented digital platforms that facilitate communication and access to information, allowing our clients to manage their policies and claims in a more agile and transparent way.”"we

Rapid expansion

Couto is speaking with a lot of context – and on the back of what has been a steep growth curve. MDS Brasil has been expanding its footprint in recent years, both in the Brazilian insurance market, and, via its parent, in the wider region and globally. It has also bolstered its footprint in both insurance and reinsurance in recent years.

In August 2024, this strategy, focused on combining organic and inorganic growth, culminated in the largest acquisition in its history; it bought D’Or Consultoria, a broker specialising in health, dental, life insurance, and pensions. The deal expanded MDS Brasil’s health and benefits offerings, reinforcing its position in the insurance and risk consulting market.

Couto illustrates the significance of the deal in numbers; its portfolio in this segment more than tripled in size, from 1 million to 3.5 million lives under management, and the premiums handled grew from R$4 billion ($680 million) to approximately R$10 billion ($1.4 billion), considering all the lines in which it operates. 

Today, MDS also leads its segment in Portugal and Angola, and is also present in Mozambique, Spain, Chile and Cyprus. As a complement to its international operations, the corporation operates through Brokerslink, a company founded by the group which manages a network of brokers present in around 135 countries, totaling more than 25,000 insurance professionals. 

In reinsurance, the organisation operates in Brazil, Portugal and Africa under the MDS Re brand and in Chile through RSG Re. Risk Consulting Group (RCG), also part of the group, offers risk analysis, loss control, business continuity planning and enterprise risk management. It also owns HighDome, a protected cell company (PCC) in Malta through which it offers alternative risk transfer solutions to clients.  

But Couto stresses the company is not done yet. Its 2025 targets include plans to expand MDS in Brazil and Latin America further. But, since the D'Or Consultoria deal, its emphasis has changed somewhat. 

“In the last six years, we have made 14 acquisitions in completely different niches. We have always looked for segments in which we had little presence and which we wanted to expand. With the arrival of D'Or Consultoria, our strategy has changed somewhat; we are now focused on solid growth and offering an even higher aggregated value to our clients, consolidating MDS as one of the leaders in the Brazilian insurance market,” he said.

“Moreover, we are expanding the company's share in Latin America. We are open to evaluating future opportunities in all the segments in which we operate.

“I also see the evolution of the reinsurance scenario in Brazil as a unique opportunity for growth,” he said, coming back to his earlier point around the importance of reinsurance.

 For more news from Miami Reinsurance Week Today, click here.

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