Regulators across Latin America are increasingly working together to establish uniformed parameters to supervise and regulate the insurance industry. But regulatory concerns remain one of the biggest issues for insurers and reinsurers operating in the region and they can have a big influence on the attractiveness and viability of different markets.
Rates, catastrophe risks and the quality of data will be the three biggest talking points at FIDES 2013, according to Mike Hughes, chief executive of Aon Benfield Latin America.
The influx of alternative capacity into some parts of the reinsurance markets globally is having little effect on Latin America, according to Gino Smith, regional chief underwriter of XL’s reinsurance operations in Latin America, who argues that the very different market dynamics mean the business model cannot be easily replicated.
A combination of costly catastrophe in parts of the world previously regarded as low risk in recent years and greater regulatory oversight is forcing insurers and reinsurers globally to adopt financial catastrophe management best practices from around the world – and this includes insurers in Latin America.
Panama-based reinsurer Barents Re has grown quickly in recent years and will shortly enter the Puerto Rican market, according to Arturo Falcon, chief underwriting officer for Latin America and the Caribbean at Barents Re.
The potential growth prospects of the economies of Latin America combined with weak growth in more mature economies around the world has prompted many reinsurers to target Latin America, according to Sergio Montoya, managing director, Willis Re Latin America & Caribbean.
The increasing presence and competitive nature of global insurers in the Latin American insurance markets has served to actually decrease the market’s potential for reinsurers as an increasing portion of premiums are being retained by these groups or placed through bigger international reinsurance deals.
AEGIS London has added two to its terrorism and aviation war account with the aim of increasing its underwriting footprint in the market.
The strong economic growth experienced in Latin America over the past decade has bolstered employment, income and savings, as well as the penetration of life insurance in the region.
Latin America is now ‘the place to be’ for many international insurers and reinsurers which are attracted by the region’s bullish growth prospects compared with other parts of the world, according to Vyvienne Wade, managing director of Latin America, Canada, Europe and the Caribbean at Arthur J. Gallagher.