The parametric future is being created now across Latin America. For decades, the global (re)insurance industry focused primarily on North America. Europe and select Asian markets were second-order, and “LatAm” barely got a look-in. That old outlook is changing quickly.
South America is emerging as one of the most important growth regions in the world. In my view, it is becoming the center of gravity for the next generation of parametric insurance and alternative risk transfer innovation.
As a gringo who spent significant time working across Latin America, I can say honestly that I have fallen in love with the continent. I admire the entrepreneurial spirit, the resilience of its people, and the willingness of markets across the region to embrace innovation. There is a level of energy, creativity, and collaboration is unlike any other region.
Perfect for parametric
South America faces meaningful exposure to natural catastrophes. Earthquakes along the Pacific corridor, floods across major river systems, severe convective storms, and agricultural droughts are just some of the threats. At the same time, insurance penetration in many countries remains relatively low. Those realities combine to form a large and very real protection gap.
The combination of high exposure and underinsured economies creates the ideal environment for parametric insurance. These new-style solutions allow risk to be transferred through structures with transparent and objective triggers that are tied to measurable, unequivocal data such as rainfall, wind speed, or earthquake magnitude. They may also be tied to industry loss indices, to fit seamlessly into existing reinsurance towers and models outcomes.
When those triggers are met, claims payments can be made quickly. That provides immediate liquidity to governments, businesses, farmers, and communities when they need it most.
ART in Latin America
Beyond parametric structures, South America is rapidly becoming a hub for broader alternative risk transfer innovation. Structured reinsurance solutions, industry loss warranties, public-private risk facilities, captive-supported programs, and capital markets participation are expanding across the region.
As climate volatility increases globally, flexible capital solutions are no longer optional; they are essential. Many of the most forward-thinking initiatives in this space are now being developed with Latin America at the center of the strategy.
LIRG’s LatAm commitment
When founding LIRG we made a deliberate decision that Latin America would not be an afterthought. It is a strategic priority.
Our focus has been to build infrastructure that connects global reinsurance capital, data providers, and underwriting expertise directly with regional opportunities. We are working to make risk transfer faster, more transparent, and more accessible across the region through parametric structures, alternative risk transfer facilities, and innovative underwriting programs.
We believe that building long-term partnerships in Latin America requires more than placing risk. It requires local engagement, collaboration with regional brokers and MGAs, investment in product innovation, and a commitment to developing solutions that reflect the realities of each market. That philosophy has shaped how we deploy capacity, structure programs, and support emerging underwriting platforms across the continent.
Personally…
From my perspective, South America is not a secondary market. It is one of the places where the future of insurance is actively being built. I came to the region initially because of business opportunities. I stayed because of the people, the relationships, and the conviction that the next era of our industry will be shaped by the work happening here.
The future of parametric insurance, the expansion of alternative risk transfer, and the modernization of global (re)insurance structures will increasingly be influenced by what is being created across Latin America.
At LIRG, we are proud to be building alongside our partners across the region, and investing in a future where innovative risk transfer solutions help drive economic resilience and long-term growth.
South America is not simply part of the future of our industry. It is one of the places where that future is already happening.
Mark Groenheide, CEO, Latin International Reinsurance Group
Related articles:
