The risks and opportunities offered by Latin America’s tech boom

“Latin American reinsurers have always navigated a challenging space,” explained Bruno, Freire, group chief executive officer of Austral as he discussed both the risks and rewards of this market. 

“But for those who know how to navigate these challenges, opportunity abounds.”

“If we consider all the economic and political tensions, regulatory changes and the increase in climate-related losses, it is clear that the region presents unique difficulties. 

“Despite these factors, there are still a lot of opportunities considering the protection gap, the transformation that new technology can bring to improve underwriting capabilities, as well as the instability of appetite of some reinsurers for the region.”

The climate factor: a game changer

2024 was the warmest year on record, and Latin America felt the full force of climate volatility. 

Brazil traditionally considered a non-catastrophe country, experienced severe, unexpected flooding that took the market by surprise. 

“As reinsurers, it is our duty to help the market capture data and control exposures in a more effective way,” said Freire.

“This will allow the market to keep solvent and to respond to its needs.”

One emerging solution? Parametric insurance. 

“We expect parametric insurance to grow as an option as companies advance in technology and data analytics,” Freire noted. 

“Although it presents different challenges depending on the country, parametric solutions can contribute to the availability and affordability of insurance cover, simplifying not only recoveries but also the understanding of coverage by final consumers.”

The political and economic landscape in Latin America is, at best, unpredictable; reinsurers must be agile, offering more than just capacity – they must be advisers, innovators and partners in resilience.

Austral Re has been in the market for 14 years, expanding its operations across 18 countries. 

“We have always considered ourselves an underwriting company with an advisory approach,” Freire explained. 

“When it comes to capital solutions and product development, we don’t just pay claims quickly – we proactively offer new products and reinsurance structures that help clients adapt to market demands. 

“This has resulted in sustainable growth across various lines of business and countries.”

Despite macroeconomic challenges, Latin America’s reinsurance market is far from stagnant and Austral Re is laser-focused on areas with strong demand and potential for innovation. 

“Every day, we feel as if we have become outdated.”

“Across the region, we see lots of opportunities in surety and specialties, as these lines require more expert capacity,” Freire stated. 

“We are also considering life, as it appears to be in demand for product development. 

“Therefore, we will continue to play our role as a multi-line reinsurer.”

Surety and specialties require deep expertise and strong underwriting discipline, while life presents a unique opportunity for product innovation tailored to evolving consumer needs. 

In each case, the key to success is not just offering coverage but designing solutions that fit the intricacies of Latin American markets.

Technology and data: the new frontiers

Digital transformation will shape the future of reinsurance in Latin America.

From underwriting and pricing to claims and risk assessment, data and AI are becoming indispensable tools.

“Digital transformation is a challenge not only in the insurance market but in our society,” Freire noted.

“Every day, we feel as if we have become outdated. 

“A good underwriting policy relies on good data and analytics, and at Austral Re, we have started an intense transformation in all underwriting aspects – from the way we capture data, model exposures, control volatility, to the pricing of our business.”

The promise of AI and data-driven underwriting is immense. 

“We believe that all the innovations provided by the development of data and AI will be useful in the entire underwriting cycle in insurance and reinsurance,” Freire said. 

“This will help companies improve services, gain efficiency and deliver more comprehensive solutions to society – while maintaining healthy, consistent results.”

Latin America’s reinsurance market is not for the faint of heart as it demands agility, expertise and a proactive approach to risk.

From increasing climate-related losses to economic uncertainty, reinsurers must be prepared to adapt. 

The winners in this market may not be the largest or the most established – they will be      those that can evolve, respond to change and turn challenges into opportunities.

Bruno Freire is the group chief executive officer at Austral Re. He can be contacted at bfreire@australre.com

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

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.