Reinsurers that gathered in Costa Rica for FIDES 2025 have suggested Latin America’s role in the global reinsurance market will continue to expand. The region is experiencing increased risk appetite, new sources of capacity, and a renewed focus on closing protection gaps.
International interest is rising, with new entrants such as managing general agents and capital providers from the Middle East and Asia.
“We are seeing plenty of capacity entering the market, including a noticeable increase in MGAs,” said April McLaughlin, managing director at Howden Miami. She noted that many of these firms are new to the region and not limited to the Americas.
“We’re seeing interest from firms in the Middle East and Asia who want to diversify their portfolios and take on some regional exposure. It’s clear that global appetite for the region is growing,” McLaughlin said.
Market conditions in Latin America reflect broader global trends, as outlined in Howden Re’s recent report. The industry is entering a phase of softening within a hard market, creating opportunities for innovation while maintaining underwriting discipline.
“Hurricane Melissa will likely keep reinsurers cautious across the region, especially in Central America and the Caribbean, where wind exposure is high,” said Mario Baotic, head of international growth markets at Howden Re. Baotic added that while softening trends are present, regional variations remain significant.
“People want to know what kind of discounts they can expect and how much capital is available,” he said.
These shifts are occurring even as insurance penetration across Latin America remains below 5% of GDP, according to AM Best. Despite this, demand for reinsurance capacity is rising, driven by the region’s exposure to a wide range of natural hazards.
In 2024, insured catastrophe losses totaled US$11.6 billion, but only US$1.5 billion of those losses were actually insured, highlighting a persistent protection gap. Global reinsurers are renewing their interest in the region, and local companies are working to strengthen their brands and fill gaps left by previous hard market conditions.
Digitalization and artificial intelligence are also beginning to shape the insurance and reinsurance landscape, with the aim of improving efficiency and expanding offerings to underserved populations.
The competitive environment for reinsurance in Latin America has been reinforced by strong capacity and increased flexibility in terms and conditions, also highlighted in Aon’s mid-2025 report.
The region has seen moderate decreases in property catastrophe pricing as it begins to ease from previous highs. Ample capacity from traditional reinsurers, insurance-linked securities markets, and new entrants is allowing cedents to access more tailored solutions and expanded coverage options.
This influx of capital is further illustrated by Aon’s September 2025 renewal report, which notes that global reinsurance capital reached a record US$735 billion, with alternative capital at US$121 billion.
Catastrophe bond issuance for 2025 surpassed US$17.3 billion, and sidecars are expanding as a source of proportional reinsurance capacity. These developments are contributing to a more dynamic and flexible reinsurance market in Latin America, offering new options for risk transfer and capital management.
