Latin America and Caribbean insurance rates

Q2 2024

Latin America and Caribbean rates increase

Insurance rates in the second quarter of 2024 in the LAC region increased 4%.

Latin America and Caribbean second quarter 2024

Property insurance affected by climate-related catastrophes

Property insurance rates increased by 2%, driven largely by pricing in Mexico and Brazil.

• Brazil has experienced significant climate-related catastrophes, leading to a review of underwriting criteria and limitations in coverage for events like floods.
• In Mexico, the ongoing impact of Hurricane Otis resulted in rate increases.
• Coverage for strikes, riots, and civil commotion (SRCC) saw lower rates, with discounts reaching as high as 50% in some cases; sabotage and terrorism (S&T) capacity remained limited.

Casualty rates increase, auto liability a key factor

Casualty insurance rates increased by 8%.

• Insurer competition for smaller businesses was strong.
• Auto liability continued to be an area of scrutiny for insurers as the value of vehicles and the cost of repairs have increased.

Financial and professional lines rates continue to decline

Financial and professional lines rates declined 7%.

• Insurer appetite remained strong.
• Underwriter concerns included macroeconomic issues such as challenges in the banking sector, supply chain delays, the interest rate environment, labor shortages, and the sociopolitical situation in various Latin American countries.
• Financial institutions (FIs) generally experienced low claims frequency and increased capacity - favorable conditions for rate reductions.
• Many insureds increased limits in their casualty programs.

Cyber rates decline as controls improve

Cyber insurance rates declined 5%.

• Rate reductions in the region were affected by such factors as organizations improving internal controls and increased reinsurance capacity.
• Clients with controls and risk management policies perceived as effective typically experienced discounts or flat renewals.
• International insurers generally increased their appetite.
• Some clients obtained rate improvements; others focused on enhancing conditions or increasing policy limits.