Key forces shaping growth in the LATAM reinsurance market

As Miami Reinsurance Week approaches, following closely on the discussions at FIDES 2025 in Costa Rica, attention is once again turning to Latin America and the forces reshaping its reinsurance landscape. From shifting capacity dynamics and softening pricing to evolving catastrophe risk, regulatory change, and the growing influence of MGAs, the region is entering a new phase of development. Ahead of the discussions in Miami, April McLaughlin, Managing Director at Howden Miami, and Antônio Jorge da Mota Rodrigues, Head of Treaty of Howden Re Brazil, share their perspectives on how reinsurers are viewing LATAM risk today, where market pressures are easing or intensifying, and what opportunities lie ahead as the next renewal cycles approach.

How have reinsurance capacity and pricing evolved across key LATAM markets over the past 12–18 months, and where are we seeing the most pressure or relief?

April McLaughlin, Managing Director, Howden Miami: We discussed this in depth at FIDES late last year and we can see that, over the past 12–18 months, there has been a clear increase in reinsurance capacity interested in Latin America, driven both by established players looking to grow and new entrants seeking access to the region. This influx of capacity has put downward pressure on rates across all lines of business. The most pronounced softening has been in facultative reinsurance, while excess-of-loss treaty pricing has seen more moderate reductions. On proportional treaties, ceding commissions are generally flat to slightly higher, although this has been offset by original rate reductions across the board.

Antônio Jorge da Mota Rodrigues, Head of Treaty Howden Re Brazil: I would add that the softening we are seeing in the Latin American market is broadly consistent with the trends playing out globally. That said, while pricing is easing, the market remains rational, and we see this more as a rebalancing, where lower rates are being accompanied by comparatively higher attachments and tighter terms.

How are global reinsurers currently viewing LATAM risk, particularly around catastrophe exposure, political risk, and economic volatility, and how is that shaping underwriting appetite?

April: Latin America has historically been highly exposed to catastrophe risk, political uncertainty, and economic volatility. Reinsurers with long-standing experience in the region are well aware of these dynamics and have historically managed this volatility as part of doing business in LATAM.

Antônio Jorge: I would add that even if overall catastrophe frequency has not clearly increased across Latin America, recent loss experience is reinforcing how climate-driven volatility, particularly from secondary perils, is being felt more broadly across the region. Agricultural losses in 2021 and major flooding in 2025 are clear examples of how these non-traditional drivers are increasingly influencing underwriting appetite and modelling approaches. As a result, there is an accelerated focus on improved data quality, risk selection, and structural resilience, as reinsurers reassess how catastrophe risk is evolving beyond the region's historically core peak-zone exposures.

In what ways are climate change and increasing natural catastrophe frequency influencing reinsurance structures, terms, and capital allocation in the region?

April: Latin America is a large and diverse region that has always experienced catastrophic events, and insurers and reinsurers active here have been managing these exposures for a long time. What has evolved is the increasing sophistication of risk management, particularly through greater reliance on third-party catastrophe models.

This has pushed cedants to improve the quality and granularity of their exposure data in order to feed more accurate information into the models. Cedants in the region have traditionally been conservative buyers of reinsurance, often purchasing limits that represent very high PMLs, sometimes equivalent to modelled return periods of more than 500 years.

While it is not clear that catastrophe frequency itself has increased materially, recent events such as Hurricane Melissa in Jamaica and Hurricane Otis in Mexico highlighted new challenges, particularly around rapid intensification and extreme wind speeds that were rarely seen in the past - a theme that has also come through strongly in broader regional discussions this year, including at FIDES.

Antônio Jorge: From a Brazil perspective, I would add that recent developments have accelerated catastrophe model development in areas that were historically viewed as 'non-cat' exposures. It has reinforced how secondary perils are becoming increasingly relevant in underwriting appetite and capital allocation decisions. Even if overall catastrophe frequency has not materially increased, these developments are sharpening reinsurers' focus not only on peak-zone risk, but also on broader climate-driven volatility across the region.

What recent or upcoming regulatory changes in LATAM are most impactful for reinsurers and cedants, and how are they affecting market entry, capital requirements, or contract design?

Antônio Jorge: From a regulatory standpoint, the most significant development I would point to is in Brazil. The introduction of the new 'Marco do Seguro' framework is expected to bring meaningful changes for both the insurance and reinsurance sectors, with implications for contract wordings and market structure. While some elements are still pending full operational implementation, it represents one of the most important regulatory shifts currently underway in the region.

What role are MGAs playing in the LATAM insurance and reinsurance ecosystem today, and how is reinsurer appetite for MGA-backed programs evolving?

April: This was a key topic at FIDES and we can expect MGA growth to continue to be heavily discussed and explored across the industry. Over the past five years, there has been a noticeable influx of MGAs, particularly in Miami, primarily providing facultative reinsurance capacity, with a smaller number also participating in treaty business. The number of MGAs writing Latin American risks continues to grow, both in Miami and elsewhere.

MGAs provide an effective route to market for reinsurers that are either less familiar with the region or looking to access specific segments in a more efficient and cost-effective way. The key challenge is identifying the right partners, particularly around governance and alignment. This is where brokers such as Howden, with deep knowledge of local and international market players, can add significant value.

Looking ahead to the next renewal cycles, what do you expect will be the biggest drivers of change in the LATAM reinsurance market, and where do you see opportunities for innovation?

April: Products such as parametric solutions and cyber insurance continue to gain traction across the region.

M&A activity is also likely to remain a feature of the market, with larger local insurers and multinational groups acquiring smaller players. This ongoing consolidation should create further opportunities for innovation, new partnerships, and more tailored reinsurance solutions.

Antônio Jorge: One of the most important themes for Latin America will be how the market continues to adapt to evolving climate-driven volatility, particularly as secondary perils become more prominent. From a Brazil standpoint, we are also seeing a growing emphasis on strengthening risk selection, improving exposure data, and building more resilient structures that can support long-term sustainable capacity. At the same time, the region continues to present significant opportunity for innovation, whether through new product design, alternative capital solutions, or closer alignment between cedants and reinsurers as the market continues to mature.