Insurance/Insurtech Trends in LatAm!

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Following on from our posts on Global Trends and Key Themes, we have been working our way through Insurance and Insurtech trends in the world's major markets, starting with EuropeNorth America and Asia-Pacific. This week, our journey takes us to Latin America ... We present below a round-up of our stats for the region (taken from our global insurance survey) as well as qualitative discussion with insights from two regional contributors:

  • Hilario Itriago, CEO at VC fund Bullfrog Ventures
  • Luiz Bruzadin, Founder at Brazil-based Insurtech

We begin by examining the leading external and internal challenges in LatAm and comparing them with the global trend we identified in our earlier post on Industry Challenges. The tables below show the LatAm-specific ranking for each challenge on our "challenges shortlist", as well as how this compares to the global ranking (considering allsurvey respondents).

"Latin America and the Caribbean together comprise over 600 million people spread across more than 30 countries. From an insurance perspective, this is a hugely varied market that encompasses extremes of wealth and poverty, with abundant opportunities not just in ‘traditional’ insurance but also in the mass-market and micro-insurance categories as well."

Mariana Dumont, Head of New Projects at Insurance Nexus


The External Challenges: LatAm

The external challenges cited by our Latin-American respondents were the least representative of the global trend for external challenges we outlined in our earlier Industry Challenges post. 

The global top three were ‘Technological advancement’ (leading on points by some margin), ‘Changing customer expectations’ and ‘Digital channel capabilities’. The top three for LatAm has a rather different complexion: ‘Changing economic conditions’ (4 places higher than globally, at the very top of the table), ‘Technological advancement’(having dropped a place) and ‘Increased regulation’ (3 places higher than globally). 

‘Changing customer expectations’ (2nd place globally) plunges to 7th position, and ‘Digital channel capabilities’ (3rd place globally) slips one place to 4th. In the middle of the table, we notice that ‘Increased competition’ has also risen a couple of places.

How might we explain this difference in outlook that we find in LatAm? ...

We should of course bear in mind that we are dealing with a smaller number of respondents for LatAm, so shouldn’t read too much into minor variations from the global trend (details on the overall make-up of our survey respondents are included in the full Trend Map, which you can download whenever you like). Some of the ones we have just pulled out, however, appear quite substantial.

Technology, digital channels and customer expectations (the global top three) are all key challenges for the world’s insurers for the same reason – they are part of the response to today’s customer-driven disruption, something which, across this report, we have traced back to changes to distribution and the arrival of digital channels. 

See also: Insurance Nexus Global Trend Map #9 Distribution

That this triumvirate of challenges appears less important in LatAm might in theory indicate that the trend towards customer-centricity is less pronounced here. However, based on our small sample of responses, we can say – tentatively – that Customer Centricity is the leading priority area for carriers in the region, so this explanation seems unlikely.

See also: Insurance Nexus Global Trend Map #3 Insurer Priorities

Therefore, rather than the trend towards customer-centricity being less important, it is perhaps the case that other factors – which may well be transient – have grown more important and are grabbing insurers’ immediate attention. ‘Changing economic conditions’‘Increased regulation’ and ‘Increased competition’ – an alternative "challenge triad" for LatAm – potentially fit the bill as adverse market factors, unglamorous and unrelenting, each of which we discuss in greater depth later in this profile.

Over the past few years, recessionary conditions have weighed heavily on key markets, particularly Brazil, Argentina and Venezuela. However, the regional economic downturn is expected to reverse in 2017, with the IMF forecasting GDP growth of 1.6%. A turnaround in commodity prices on both fuel and non-fuel products will help drive that recovery.

2017 Latin American insurance outlook, EY


The Internal Challenges: LatAm

The top internal challenge among Latin-American respondents was, in line with the global trend we identified in our Industry Challenges post, ‘Lack of innovation capabilities’‘Finding and hiring talent’ appears one place above the global trend in second position, pushing ‘Legacy systems’ down one spot.

Of note is the bottom place attained by ‘Siloed operations’ in LatAm, below ‘Mergers & acquisitions activity’ even though this had a significantly lower score than ‘Siloed operations’ on the global internal-challenges table (see our post on Industry Challenges).

This may be more a case of other factors seizing insurers’ attention than of silos being unimportant, or a consequence of our smaller number of respondents from Latin America (details of all our respondents are included in the full Trend Map). We have no reason to suspect that silos are significantly less of an issue here than elsewhere around the globe. Indeed, we will see in the second half of this profile on LatAm that M&A activity is not just a factor in past company expansions and future company growth but also, notably, a cause of much back-end complexity (like silos!) among incumbents.

Historically, high growth potential has attracted global insurers, reinsurers and brokers to the region through M&A. With economic conditions likely to improve, international players may reinforce their positions, particularly in key markets such as Brazil.

2017 Latin American insurance outlook, EY


Insurer Priorities: LatAm

From the limited data our survey gathered on LatAm, one priority area that particularly stood out for this region (relative to others) was Fraud (out of the shortlist of 15 priority areas introduced in our Insurer Priorities post). Other stand-out areas were Product Development and Cybersecurity.

See also: Insurance Nexus Global Trend Map #11 Fraud

See also: Insurance Nexus Global Trend Map #12 Cybersecurity

See also: Insurance Nexus Global Trend Map #15 Product Development

We touch on the foregoing challenges and priorities in our qualitative discussion with regional contributors Luiz Bruzadin and Hilario Itriago — which follows below. This discussion falls into three broad thematic areas, the first of which we cover today (saving the remaining two for our follow-up post, which completes our LatAm Profile):

  1. Latin-American insurers’ efforts around digital transformation
  2. New models of innovation involving Insurtechs
  3. LatAm’s positive growth factors and the outlook for the market over the coming years

Download the Global Trend Map here to access the full profile on Latin America straight away, as well as our other six Regional Profiles!


1. Market Characterisation: Digital Transformation in LatAm

Asked to comment on the main challenges facing Latin-American insurers,'s Luiz Bruzadin cited his top three as a lack of economic growth, the decline in interest rates and a lack of insurer productivity. These conform to the picture of dominant market factors we sketched out earlier (they are essentially the ‘Changing economic conditions’ that came out as the region’s top external challenge).

Since sluggish growth and low interest rates are global phenomena, this raises the question as to why both our survey respondents and our industry contributors from LatAm assign them such pre-eminence. Part of this may be to do with the third challenge listed by Bruzadin, namely the lack of insurer productivity – this makes extraneous market factors, which are putting pressure on (re)insurer margins worldwide, doubly painful.

With slack yields from financial markets and, often, minimal foreseeable policy growth in the short term, insurers all around the globe are having to learn to do more with less, and poor productivity simply leaves them with even less to do it with. One obvious way to make up for this shortfall, not just for Latin-American insurers, is to drive lower costs and greater efficiency.

From a cost-savings perspective, one area of low-hanging fruit would appear to be fraud, which needlessly siphons off millions of insurance dollars every year. As we noted earlier, Fraud was indeed an important priority area for Latin-American respondents – Bruzadin acknowledges it as a big issue for the region and one of the 'costs of doing business', and he believes that the transformation initiatives already underway within insurers will go some way at least towards alleviating the situation. Our other regional contributor, Bullfrog Ventures' Hilario Itriago, agreed on the primacy of technology for meeting the fraud challenge head on:

‘Speaking about LatAm in general terms might be unfair, as fraud changes by country,’ he clarifies. ‘Companies need to be aware of it, but equally I think technology will play a great role in helping insurance companies to protect themselves against it.’

From an efficiency perspective, Itriago points to automation as a key area of interest for Latin-American insurers:

‘Anything and everything to do with automation that simplifies the existing processes is driving new ways of doing things,’ he observes. ‘And the main example there would be AI – AI is driving the claims process to levels that we never imagined, particularly in the personal-lines space.’

While automation is mainly associated with driving efficiencies within personal lines, Itriago believes that the same tools can massively streamline work in the commercial space as well:

‘Clearly it will take more time, because we’re talking about properties, about engineering, about large risks, so you need a lot more know-how,’ he explains. ‘That said, even those underwriters need tools and mechanisms to make those processes work a lot faster than they’ve typically been, and the same is true for claims.’

We should bear in mind though that simply finding ways to make the old cogs of the business turn more smoothly is rarely enough to achieve higher overall productivity in the long term. Another imperative for Latin-American insurers is to maintain – and grow – the relevance of their insurance products and services to modern consumers, or else the shifting sands of the market may simply run away between their fingers.

‘The main challenge clearly has to do with adapting to newer customer needs,’comments Itriago. ‘It’s a lot more online, it’s a lot more mobile, it’s a lot more about trying to get greater clarity and simplicity out of the products that people want to purchase. So customer-driven innovation and different ways of consuming the insurance products is the first big driver happening at the moment, and Latin America is no exception to that.’

Bruzadin is also quick to highlight changing consumer consumption patterns, placing particular emphasis on the on-going shift to mobile:

‘Customers want to buy using their mobile, so today there is a need to build different channels from scratch to connect with the new client,’ he explains. ‘Generation X are not buying anymore – the new generation of consumers want simpler products quicker, faster solutions, and direct contact with insurance companies. Companies that are not investing in customer-centricity, user experiences or improving customer value will lose the game in my opinion.’

Access the full Regional Profile for Latin America here ...

What we see here then is that the paradigm of customer-driven disruption that we have returned to time and time again throughout this content series is indeed alive and well in LatAm, immediately underneath insurers’ perhaps more day-to-day concerns with market factors. 

"The common denominator that’s sweeping the industry right now is this whole wave of Insurtech. It applies to anybody and anywhere in the world."

Hilario Itriago, CEO at Bullfrog Ventures

A key stat we have invoked across this series is the ‘disruption score’, or the proportion of carrier respondents acknowledging loss of market share, which we introduced in our post on Insurtech Perspectives. We have limited data for LatAm on this measure but we can say with reasonable confidence that the figure is more in line with the higher score of Asia-Pacific than the lower scores of Europe and North America. The heightened competition this implies is in any case borne out in the higher rank of ‘Increased competition’among LatAm’s external challenges, to which we drew attention above.

"Currently, I don’t think we have the capabilities to transform the way of doing business using digital technologies in Brazil… There is a lot of talk on investments in digital transformation but little action. I cannot see the players on the market really investing in digital transformation."

Luiz Bruzadin, Founder & General Director at

Both Bruzadin and Itriago believe that it is only through increased focus on, and investment in, new technology that insurers will be able to make the life-affirming leap in productivity and relevance. In this sense, LatAm is very much a part of the broader trend we see at work in insurance globally:

‘The common denominator that’s sweeping the industry right now is this whole wave of Insurtech,’ notes Itriago. ‘It applies to anybody and anywhere in the world.’

In our follow-up post later this week, we conclude our exploration of Insurance and Insurtech trends in Latin America, with a particular focus on the longer-term growth potential for insurance – and insurance innovation – in the region. To get our whole LatAm Profile straight away, read ahead now by downloading the full Trend Map here, which includes our six other Regional Profiles on EuropeNorth AmericaAsia-Pacific, the Middle EastAfrica and Central Asia.

For any inquiries relating to the Insurance Nexus Global Trend Map, this on-going content series or next year's edition, please contact:

Alexander Cherry, Head of Research & Content at Insurance Nexus (

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