Complex market to continue in Southern LatAm; opportunities in specialty lines: MS Re

Complex market conditions are set to persist across Southern Latin America, driven by strong demand and recent secondary peril losses. MS Reinsurance’s Santiago Deluchi explains where opportunity exists and caution remains.

Key points:
Non-modelled perils  driving tighter pricing
Specialty lines still attract appetite
Brazil’s new insurance law reshaping underwriting

As Latin America’s reinsurance market becomes more technically driven, the Southern Cone is increasingly standing out as a region where underwriting discipline is tightening, even as reinsurers continue to deploy capacity selectively.

Catastrophe-exposed portfolios across the region are being scrutinised more closely, with less tolerance for volatility and weaker performance. At the same time, underwriters are leaning into specialty lines as portfolios are recalibrated heading in 2026. 

“Specialty lines, such as surety, agriculture, motor, life and health, are segments where we will continue playing an active role,” Santiago Deluchi, lead underwriter at MS Reinsurance, told Miami Reinsurance Week Today. “They offer opportunities for selective growth, even as caution remains necessary across the broader market.”

That balance – discipline on cat risk alongside targeted opportunity – is increasingly shaping underwriting strategy in southern Latin America. Rather than stepping back from the region, reinsurers are becoming more selective, tightening pricing and terms where cat exposure demands it, while focusing on lines that support diversification.

“Southern LatAm presents a more heterogeneous risk profile and business mix compared to the wider LatAm region.”

For MS Re, that approach reflects a continuity of their existing strategy. Deluchi said the reinsurer expects the “complex market to continue” in southern LatAm in 2026, driven by sustained demand, recent catastrophe losses and the need for discipline. The company will maintain a multi-line strategy focused on technical discipline and long-term client relationships, rather than short-term volume.

“Southern Latin America is a key region for us,” he said. “It presents a more heterogeneous risk profile and business mix compared with the wider LatAm.”

With most Southern Cone renewals concentrated in July, underwriting outcomes are already diverging. The market, Deluchi noted, is “no longer willing to dilute performance within broader Latin American portfolios, and pricing outcomes are increasingly driven by technical performance.” 

As a result, diversified portfolios with strong exposure data and stable loss experience are seeing more predictable renewals, while loss-impacted or volatile accounts are facing continued rate pressure and reduced flexibility.

Chile and Peru, both cat-exposed markets, are feeling pressure on the primary rates, while cedants are also requesting greater flexibility on terms and conditions.

Political and regulatory developments are also feeding into underwriting decisions across the region, though outcomes vary by market. Chile remains one of the more stable and technically developed insurance markets in the Southern Cone, supported by strong data quality and granular exposure information. Deluchi said he does not expect major underwriting shifts, but sees improving economic activity translating into increased business volumes.

Bolivia, meanwhile, is showing early signs of a more positive trajectory, with large risks increasingly returning to the private market. 

Regulation reshapes opportunity 

Brazil’s new insurance law is reshaping underwriting considerations, product structures and market opportunities. 

“To navigate this path of uncertainty, maintaining open and transparent communication with clients will be critical, as will be choosing the right partner,” said Deluchi. 

A key requirement under the new framework is clearer alignment between primary policy wordings and reinsurance contracts. With the new framework implemented, a reduction in coinsurance participation is anticipated, making proactive portfolio management increasingly important.

In addition to the new law, the Brazilian Federal Government has issued a decree increasing the Tax on Financial Transactions (IOF), which is expected to affect both the insurance and reinsurance markets.

At the same time, Deluchi sees opportunity emerging from the regulatory reset. 

“The new law creates a more supportive environment for non-traditional and emerging risk products, such as parametric or index-based covers and other specialty lines,” he said. “From a reinsurance standpoint, this opens opportunities for structured treaties and alternative risk transfer solutions.”

In Argentina, recent catastrophe and non-catastrophe losses have reinforced the need for tighter discipline in risk selection and aggregate control, particularly given the country’s fragmented coinsurance structure.

“A large-scale event in a major city is not required for losses to be significant,” said Deluchi, pointing to the 2025 Bahia Blanca flood as a reminder that loss severity can emerge outside the largest accumulation centres.

As a result, pricing in Argentina remains firm and highly technical, with limited scope for normalisation. Capacity for coinsurance risks is expected to remain constrained, making allocation increasingly selective.

“Argentina remains a strategically important market,” Deluchi said. “Risk selection, pricing discipline and controlled capacity deployment will continue to dominate underwriting decisions heading into 2026.”

Looking ahead, Deluchi said clients and brokers can expect continuity from MS Re.

“Our strategy is unchanged,” he said. “We will continue to build our capabilities to serve our clients, with the same long-term approach we have followed since we entered the region more than 10 years ago.”

Santiago Deluchi is lead underwriter at MS Reinsurance.

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