The 1 July 2026 reinsurance renewal in Latin America completed in a market defined by abundant capacity and intensifying competition. Existing local players were joined by expanded interest from Bermuda, London, and MGA markets, which deepened the supply base.
Property catastrophe excess of loss programmes saw rate reductions in the range of 15% to 20%. Downward pressure was compounded by a trend of over-placement, with programmes attracting more capacity than required.
Proportional capacity was also plentiful, with ceding commissions rising by two to three additional points as reinsurers competed for access to cedent portfolios. As proportional cessions increased, cedents purchased smaller catastrophe excess of loss limits.
The softening has continued even as the region's protection gap remains wide. Howden Re Brazil head Antônio Jorge da Mota Rodrigues has said the softening is consistent with global trends, with lower rates accompanied by higher attachments. He pointed to Hurricane Melissa in Jamaica and Hurricane Otis in Mexico as examples of new catastrophe challenges.
The Latin American softening mirrored a broader global trend at the July renewal. The Guy Carpenter global property catastrophe rate on line index fell 16% at mid-year. Venezuela's earthquakes of 24 June 2026 caused an estimated US$6.7 billion in damage in a country with low insurance penetration.
Reinsurers used the renewal to broaden their footprint. With property catastrophe capacity comfortably placed, appetite extended into casualty and specialty lines as markets sought to round out their Latin American portfolios.
April McLaughlin, head of Howden Miami, said Latin America is attracting a broader and more competitive reinsurance market than in recent years. She said the interest from Bermuda, London, and MGA markets points to a reassessment of the region's risk-adjusted opportunity.
That reassessment has not closed the region's coverage gap. AM Best has reported that insured natural catastrophe losses in Latin America totalled US$11.6 billion in 2024. Only $1.5 billion of that was covered, with insurance penetration across the region remaining below 5% of GDP.
Low-attaching, high rate-on-line layers on both catastrophe and risk programmes attracted increasing interest in structured solutions at this renewal. Parametric products also gained traction, having moved from a niche consideration to a more broadly evaluated coverage option, according to Howden Re.
Carlos Garcia, managing director at Howden Re, said the renewal showed an increasing willingness to explore alternative approaches to risk transfer. He said cedents are giving more consideration to structured solutions and parametric products as part of their overall coverage strategy.
Latin America's July renewal sat within a broader buyer-favourable cycle across the Americas. Aon has reported growing use of facultative reinsurance and casualty sidecars as strategic tools during the 2026 renewal season. Catastrophe bond issuance exceeded US$16.8 billion in the first half of 2025, a record for the period.
The Latin America reinsurance market enters the second half of 2026 with capacity at levels that continue to favour buyers, according to Howden Re. Structural trends visible at this renewal included over-placement, rising ceding commissions and appetite migration into casualty and specialty lines.
