Photo: Filipe Frazao / Shutterstock.com
According to a new recent report by Aspen, the Latin American market is beginning to open up, but reinsurers face a fiercely competitive environment.
That is the word from Jorge Canardo, senior vice president and deputy head of Latin America at Aspen, who says that loss free property catastrophe results since the Chile earthquake of 2010, and the diversification benefits of non-cat countries such as Argentina and Brazil, are creating fiercely competitive dynamics in the region.
He describes the rating environment in Latin America as being “very much in line with the general soft trends experienced in the 2014 1/1 market renewals.”
Canardo says that this has encouraged more opportunistic reinsurance buying by local and regional insurers that have sought to take advantage of the favourable rate environment.
Fortunately this rise in interest has coincided with the lowering of barriers to entry in the region, particularly in Brazil, although boots on the ground remain important for any reinsurer looking to develop a presence.
Canardo suggests that reinsurers will be able to bring invaluable expertise to bear in South America, particularly in light of low levels of insurance penetration. Currently Latin America represents 4.9 percent of the total non-life insurance market by premium income, but there is considerable scope for growth.
Demand for coverage for large infrastructure projects such as the World Cup and Olympics are the headline news, but economies and industries right across the region are growing increasingly urban, wealthy and sophisticated, with rising risk transfer needs. Reinsurers will be looking to meet these needs.
To read the full report click here.
Aspen, Latin America, reinsurance