Recent downward pricing pressure for Latin American and Caribbean (LAC) business will continue in 2026, with changes to terms and conditions also potentially in the offing provided the region avoids any major losses this year.<\/p>\n
<\/p>\n
Those were among the views shared by several Miami-based reinsurance underwriting and broking executives in recent weeks, as they reflected on a mid-year renewal that saw increased competition for some business.<\/p>\n
Pricing has continued on a downward trajectory in the year to date following the major market correction and price increases that arose in 2022, 2023 and the years since.<\/p>\n
At the same time, terms and conditions were updated, with a particular focus on attachment points, which in many cases increased significantly.<\/p>\n
Looking ahead to 2026, there is an expectation that the downward pressure on pricing will be maintained amid increased competition.<\/p>\n
THE WAITING GAME<\/p>\n
Indeed, a senior Miami-based executive from an international reinsurer said that one need only reflect on the final 72 hours before the July 1 renewal to see how property pricing in the LAC region is faring.<\/p>\n
As they explained, those clients that held out until the last moment to complete their mid-year renewal \u201cgot a better deal\u201d.<\/p>\n
\u201cI don\u2019t see that changing anytime soon,\u201d they said. \u201cThere will be a discussion on rates, that\u2019s without a doubt, and we have some room on rates,\u201d they added.<\/p>\n
Until now, the changes to terms and conditions, and notably attachments, have been weathered and absorbed. But the executive said \u201cit\u2019s a question of time\u201d before those come under pressure too, provided the market remains profitable.<\/p>\n
\u201cThey\u2019re not going to go back to where they were three or four years ago, but there\u2019s going to be pressure on attachment points,\u201d they forecast.<\/p>\n
One reinsurance broking source based in Miami said reinsurers are expecting a softening in the LAC property market.<\/p>\n
\u201cThe big players here in the Miami reinsurance market have been telling clients that their main concern is to maintain their shares, and that price is not going to be an issue.\u201d<\/p>\n
They added that, if possible, incumbents want to grow their shares on programs to maintain premium income amid softening rates but are aware that increased competition, not only from existing market players but also new ones from regions such as Eastern Europe and the Far East, will make that challenging.<\/p>\n
\u2018EXTREMELY TRANSACTIONAL\u2019<\/p>\n
The reinsurance broking executive said most conversations so far were on pricing, and that clients were less focused on terms and conditions.<\/p>\n
\u201cBuyers in this part of the world are extremely transactional. So they will focus on pricing substantially, (and) I don’t foresee a battle around terms and conditions of contracts or anything like that,\u201d they said.<\/p>\n
Another broker agreed, and said at this point, clients have largely gotten used to the changes to contact wordings and exclusions that have been imposed in recent years.<\/p>\n
\u201cMost will focus more on pricing, because there is margin there for reinsurers to cut,\u201d they said.<\/p>\n
\u201cOnce they reach a point where there is not enough margin to cut, then the negotiations on terms and conditions will start,\u201d they added.<\/p>\n
The comments come against a backdrop of improved conditions for buyers during recent renewal cycles.<\/p>\n
After reaching a peak in 2024, LAC property catastrophe pricing began to decline at the start of 2025 due to an abundance of capacity \u2013 a trend that continued at the later key renewal dates of April 1 and mid-year.<\/p>\n
SUFFICIENT CAPACITY AT MID-YEAR<\/p>\n
As Aon noted in its Reinsurance Market Dynamics mid-year renewal report, LAC reinsurance capacity \u201cwas broadly sufficient to ample, having grown over the past year\u201d.<\/p>\n
Increased appetite from traditional treaty reinsurers in the region, and for proportional coverages in particular, heightened competition during the renewal.<\/p>\n
At the same time, Aon said competition also came from the facultative reinsurance market, where capacity was deployed to supplement treaty reinsurance or carve out risks that were outside the appetite of treaty writers.<\/p>\n
That increased interest from reinsurers to deploy capacity in the LAC region was countered by demand from buyers that \u201cwas generally stable at mid-year renewals\u201d, Aon said.<\/p>\n
In its own report, Gallagher Re said the softening trend seen in the treaty market in January and April continued in the mid-year renewals.<\/p>\n
<\/p>\n
\u201cCedants across the region have benefited from some increased availability of capacity and reinsurers\u2019 appetite to expand their programs.<\/p>\n
\u201cHowever, the extent of these discounts remains closely linked to supply-demand dynamics: countries and regions with peak catastrophe exposure saw more modest reductions, while non-peak markets benefited from more favourable pricing,\u201d Gallagher Re said in its 1st View report.<\/p>\n
The Tom Wakefield-led reinsurance broker said the availability of treaty capacity at the mid-year renewals empowered cedants in the LAC region to adopt more ambitious growth strategies, which included successfully filling gaps in expiring property proportional placements.<\/p>\n
\u201cThis increased flexibility has contributed to more confident underwriting and portfolio expansion,\u201d Gallagher Re said.<\/p>\n
INCREASINGLY FAVOURABLE FAC MARKET<\/p>\n
When it comes to facultative coverage, Aon said the sector was increasingly favourable for LAC-based buyers at mid-year as reinsurers\u2019 expanded appetite created further opportunities to use the specialist protection to support their growth and manage the volatility within their portfolios.<\/p>\n
As Aon detailed, LAC-focused property facultative capacity increased at mid-year as new players entered the market and international players expanded in the region as part of broader growth drives.<\/p>\n
\u201cThere has also been growing interest for facilities backed by facultative reinsurance as well as hybrid solutions,\u201d said Aon.<\/p>\n
Gallagher Re made similar comments in its report, with the reinsurance broker describing the facultative market in the LAC region as \u201cincreasingly dynamic\u201d at the mid-year renewals.<\/p>\n
Traditional facultative reinsurers in the region and a growing number of MGAs are \u201cactively competing for business\u201d.<\/p>\n
\u201cWith many of these players pursuing aggressive growth strategies, a softening of original rates has been seen across the region,\u201d Gallagher Re said.<\/p>\n","protected":false},"excerpt":{"rendered":"Recent downward pricing pressure for Latin American and Caribbean (LAC) business will continue in 2026, with changes to…\n","protected":false},"author":2,"featured_media":9206,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[72,61,60,123],"class_list":{"0":"post-9205","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-ie","10":"tag-ireland","11":"tag-markets"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/9205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=9205"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/9205\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/9206"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=9205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=9205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=9205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}