Reinsurance capacity for Latin America has increased over the past 12–18 months, driven by established players seeking growth and new entrants looking to access the region, according to executives at Howden.
April McLaughlin, managing director at Howden Miami, said the 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," she said.
On proportional treaties, ceding commissions are generally flat to slightly higher, though this has been offset by original rate reductions across the board.
Antônio Jorge da Mota Rodrigues, head of Howden Re Brazil, said the softening in Latin America is consistent with global trends. However, he noted that while pricing is easing, the market remains rational, with lower rates accompanied by higher attachments and tighter terms.
The capacity surge comes amid record levels of global reinsurance capital. According to Aon's renewal report, global reinsurance capital reached US$735 billion, with alternative capital at US$121 billion.
Howden Re executives said firms from the Middle East and Asia are driving much of the new interest as they look to diversify portfolios and gain regional exposure. Lloyd's has also announced a new Miami office to strengthen its Latin America and Caribbean business.
According to AM Best, discounts on flat renewals have ranged from 5% to 30% across various lines, including property, terrorism, and health.
The region's exposure to climate-driven volatility is compounded by a significant protection gap.
Data from MAPFRE Economics presented at COP30 showed Latin America's insurance protection gap for climate-related disasters stands at 81%, leaving just 19% of total losses insured. This is slightly below Asia's 82.8% but nearly double North America's 43.2%.
According to AM Best, insured natural catastrophe losses in Latin America totaled US$11.6 billion in 2024, but only US$1.5 billion was actually covered. Insurance penetration across the region remains below 5% of GDP.
On catastrophe risk, McLaughlin pointed to Hurricane Melissa in Jamaica and Hurricane Otis in Mexico as examples of new challenges, particularly around rapid intensification and wind speeds rarely seen in the past.
Rodrigues added that recent loss experience, including agricultural losses in 2021 and flooding in 2025, is reinforcing how climate-driven volatility from secondary perils is being felt more broadly. "There is an accelerated focus on improved data quality, risk selection, and structural resilience," he said.
Looking ahead, McLaughlin said parametric solutions and cyber insurance continue to gain traction, while M&A activity is expected to remain a feature of the market
