Opportunities abound in the region

Risks for re/insurers are on the rise in Latin America, but so are opportunities, says Florian Kummer of Deutsche Rück.

Latin America is going through tough times. COVID-19 has hit the continent in dramatic ways, causing the worst economic recession in over a century. At the same time, life is becoming more uncertain for people and businesses: the risk landscape is becoming more extreme, complex and unpredictable. What does this mean for the region’s middle class, and for its predominant business sector, the small and medium-sized enterprises (SMEs)?

Any major setbacks in these segments would certainly have profound implications in insurance markets, above all for the regional and national insurance companies. Very rarely has it been more evident how damaging severe external shocks can be for an unprotected population and economy.

However, each crisis brings opportunity: there are signs that the economies are bouncing back, markets are adapting and the current situation has shown how important professional risk management systems are for economic growth and the well-being of the population—well-capitalised insurance and reinsurance markets based on expertise and a reliable, long-term business attitude.