Latin American Reinsurance Market Sustains Growth in Soft Cycle

Latin America's reinsurance market continues to demonstrate resilience and growth despite prolonged soft-market conditions, with primary insurers using abundant capacity and flexible terms to strengthen catastrophe protection, according to a new AM Best report.

The Best's Market Segment Report, "Latin American Reinsurance Market Demonstrates Resiliency With Sustained Growth Amid a Prolonged Soft Cycle," examines the region as part of AM Best's analysis of the global reinsurance industry around the Rendez-Vous de Septembre in Monte Carlo.

Non-life business remains the largest portion of Latin America's reinsurance market, but saturation in catastrophe lines has increased interest in casualty and specialty business. Those lines have been expanding in more developed markets, including Chile, Mexico, and Brazil.

Migration, demographic changes, and new guidelines and risk measures also are contributing to demand for life and health reinsurance. AM Best said increased protection requirements stemming from the pandemic have further supported demand.

"Interest in Latin America among the larger reinsurers is there, reflected by abundant capacity and generally flexible conditions," Inger Rodriguez, senior financial analyst at AM Best, said. "However, catastrophe experiences during the second half of 2026 given the potential impacts of a 'Super Niño' could move the needle toward a localized hard market."

Brazil remains a key reinsurance market in Latin America and has shown signs of improvement despite a challenging political and macroeconomic environment, according to the report. Although the volume of reinsurance accepted by Brazilian reinsurers has increased, their share of total premiums ceded by local primary insurers has declined.

Local reinsurers accepted approximately 70 percent of premiums ceded between 2015 and 2018. By year-end 2025, that share had fallen to 53 percent.

"This drop indicates that local insurers are ceding significantly more to reinsurers offshore, which coincides with the country's regulatory framework that is evolving toward a more open and less restrictive reinsurance market," Ricardo Rodríguez Perez, senior financial analyst at AM Best, said.

Commercial and geopolitical tensions, including conflict in the Middle East, have contributed to significant fluctuations in regional and global commodity markets. Oil price volatility in particular has created uncertainty for Latin American economies, AM Best said.

International reinsurers continue to show interest in the region after Latin American markets recorded solid profitability in 2025, supported by currencies strengthening against the US dollar and low levels of insured losses. The use of managing general agents also continues to gain popularity, either to provide capacity in Latin America or enable regional reinsurers to assume risks from abroad, contributing to the prolonged soft market.

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