Ancient Chinese merchants crossing treacherous river rapids developed a simple, yet smart, rule: spread your goods across many boats, so no single capsizing wipes you out. That intuition remains the foundation of insurance to this day.

In Latin America, that foundation is now a $215B industry—up 5.8% from last year. But relative to its size, the region has significant room to grow: it represents 8% of the world's economy yet accounts for just 2.8% of global insurance premiums.

Even regional leader Chile has an insurance market size representing just over 4.5% of its total GDP—meaning less than half the average seen in the overall international grouping of developed economies in the Organisation for Economic Co-operation and Development (OECD) of which it forms part.

Scatter plot comparing insurance spend per person and market size as a % of GDP in Latin America, showing many low-penetration markets are projected for double-digit growth | Sources: Latinometrics
LatAm's insurance market is still in its infancy

Where you look for growth matters: Colombia, Mexico, and Venezuela are all posting double-digit growth, while Argentina and Chile contracted.

To be clear, the low insurance penetration seen across Latin America reflects an underinsurance gap—not a lack of demand. New distribution, pricing models, and product innovation all have roles to play. Embedded insurance (which is coverage bundled into apps and purchases) has already reached 4.5M customers across Mexico, Brazil, Chile, and Argentina.

In conversations with our team, Daniel Aguilar from Monitor Deloitte noted that the biggest opportunity lies within the middle class and small- and medium-sized enterprises (SMEs), many of which lack coverage and are increasingly vulnerable to issues like medical inflation and climate-related catastrophes.

Employees at SMEs in particular are seeking modern, cost-effective solutions to match the benefits their peers at larger firms enjoy today. Incumbents can evolve and change how they grow to meet this demand—or risk displacement by new digital platforms and bancaseguros (bank-distributed insurance).

For a deeper look at how digital transformation is reshaping the sector, read the full report.