Latin America

Written by Alex Almaguer (Head of Latin America, Partner), Chris Burt (Senior Associate) and Martín Jiménez (Associate)

Key developments in 2025

The Latin American insurance market experienced a challenging and dynamic 2025. This was fuelled by consistent growth, an expansion in digital distribution, and increasing product sophistication, alongside regulatory volatility and a notable rise in the frequency of complex loss events.

The year was further defined by geopolitical shocks, particularly stemming from shifts in US trade policies. Given their heavy reliance on exports, many Latin American nations remained susceptible to supply chain disruptions and inflationary pressures. This translated into higher claims costs due to rising repair and replacement expenses.

Furthermore, we noted a visible influx of new participants in the region. The use of Managing General Agents (MGAs) to provide capacity or facilitate the assumption of risks by foreign regional reinsurers continues to gain traction. This trend is expected to drive demand for Delegated Underwriting Authority Enterprises (DUAEs) with specialised expertise in the Latin American market.

The region was also defined by significant legislative shifts, most notably the entry into force of the new Brazilian Insurance Contract Act (Law No. 15.040/2024) in December 2025. This Act introduces a modern legal framework that replaces the provisions of the Brazilian Civil Code, bringing substantial changes for all market participants, including reinsurers.

The new Brazilian Insurance Act adopts a pro-policyholder approach across all insurance lines, including large commercial risks. Furthermore, it imposes stricter response deadlines and limits insurers' ability to request additional information. The law also restricts the capacity to designate foreign law and jurisdiction for local disputes (see RPC's analysis here).

What to look out for in 2026

As we enter 2026, the Latin American reinsurance market is navigating a strategic "softening" phase within the broader hard market cycle. This shift is characterised by a significant influx of global capacity and a heightened risk appetite from new market entrants. While 2025 was defined by geopolitical trade shocks, 2026 is poised to prioritise underwriting innovation and technological maturity.

Market participants should closely monitor the diverging economic trajectories of the region's leading economies. While Brazil and Argentina show signs of business stabilisation and growth, Mexico faces a more complex outlook driven by ongoing trade tensions and fiscal reforms. Specifically, recent modifications to VAT rules may escalate premiums and claims costs for personal lines; furthermore, commercial lines may be adjusted as insurers seek to offset potential premium losses.

The insurance market should maintain a close watch on the shifting political landscape between the US and Venezuela. A potential regime change could lead to the lifting of sanctions and the reopening of the Venezuelan oil market, home to the world's largest proven reserves.

Key themes for the year will include the rising dominance of Managing General Agents (MGAs), the integration of predictive AI, and the implementation of new regulatory frameworks such as the new Brazilian Insurance Act.

We expect an increase in cyber risks as it is one of the fastest-growing claims areas globally, and Latin America is no exception. The market, while smaller and less mature than in the US and Europe, is experiencing the fastest growth in cyber insurance premiums.

Political Risk and Violence remains a primary concern. Political instability in specific jurisdictions, exacerbated by social inequality, elevates the risk of severe claims arising from civil unrest, strikes, riots, and looting. Underwriters must remain vigilant as these localised events can lead to significant aggregate losses across commercial portfolios.

Finally, in 2026, the Latin American market will also witness a sharp rise in Special Risks, particularly concerning the theft of high-value assets. Driven by a surge in organised crime and the escalating global value of commodities, losses involving gold bars, luxury watches, and fine art have become a primary concern for regional underwriters. As gold prices remain volatile and illicit mining persists in the Andean region, the ability to distinguish between legal and smuggled assets has become as much a matter of compliance as it is of risk management, leading to a higher demand for more "forensic" underwriting and specialised loss adjusters.