As soft-market conditions persist across Latin America’s reinsurance landscape, primary insurance companies are taking advantage of the overall flexible conditions to strengthen their catastrophe protections, according to a new AM Best report.
While non-life business continues to be the largest portion of Latin America’s reinsurance markets, saturation in catastrophe lines of business has kindled interest for casualty businesses and specialty lines, which have been growing in the more sophisticated markets such as Chile, Mexico and Brazil. Factors like migration and demographic changes, as well as new guidelines, risk measures and increasing protection requirements stemming from the pandemic, have increased demand for life and health reinsurance.
“Interest in Latin America among the larger reinsurers is there, reflected by abundant capacity and generally flexible conditions,” said Inger Rodriguez, senior financial analyst, AM Best. “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’s reinsurance industry remains a key Latin America market and has showed signs of improvement amid challenging political and macroeconomic environment, according to the report. At the same time, although the volume of reinsurance accepted by Brazil’s reinsurers has grown, the share of Brazil’s reinsurers among the total premium ceded by local primary insurers has decreased. Local reinsurers accepted approximately 70% of the premium ceded between 2015 and 2018; at year-end of 2025, this percentage dropped to 53%. “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,” said Ricardo Rodríguez Perez, senior financial analyst, AM Best.
Other report takeaways include:
- Commercial and geopolitical tensions, as well as the conflict in the Middle East, have created significant variations in regional and global commodity markets, particularly in the price of oil, which has demonstrated increased volatility and created uncertainty in Latin American economies.
- International reinsurers’ interest in Latin America continues, as these markets experienced solid levels of profitability in 2025, supported by strengthening currencies against the U.S. dollar and low levels of insured losses.
- The use of managing general agents, either to provide capacity to the Latin American market or to take risks by regional reinsurers from abroad, continues to gain popularity and has contributed to the prolonged soft market.
To access the full copy of this Best’s Market Segment Report, “Latin American Reinsurance Market Demonstrates Resiliency With Sustained Growth Amid a Prolonged Soft Cycle,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=368471.
For recent global reinsurance reports and coverage of AM Best’s “Reinsurance Market Briefing – Rendez-Vous de Septembre (Monte Carlo),” please visit the Reinsurance Information center. AM Best TV coverage of Rendez-Vous de Septembre can be seen at https://www.ambest.tv/rvs26.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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