Pursuing insurance growth in Latin America

Latin America is consolidating as the world’s fastest-growing and most profitable region for insurance. Insights from McKinsey’s Global Insurance Report 2025 find that while it accounts for just 3 percent of the world’s insurance market, gross written premiums grew at 11 percent annually from 2019 to 2024, and the region retains significant room to grow. Penetration levels across Latin America remain lower than in other major markets (Exhibit 1). Claim levels have also improved. But profitability has still exhibited some volatility: Earnings decreased in countries such as Argentina, Brazil, and Colombia in 2024.

This strong financial performance comes as the region’s market dynamics are shifting. Growth is being driven by nonlife insurance segments, especially property and casualty (P&C). Home and auto insurance have increased significantly, driven by rising policy prices in auto contracts between 2022 and 2023, though growth in these segments may decelerate as this repricing phase slows. That may deliver stronger growth to the life segment—a shift we began to see during 2024.

Image description A segmented bar chart shows how Latin America’s insurance market has grown on an accelerated trajectory for the past decade. A stacked bar for every year from 2014 to 2024 displays the total value of gross written premiums (GWP) for nonlife and life products, with the total of those two figures providing the annual value of GWP. 2014 has total gross written premiums of $83 billion, and estimated 2024 GWP is valued at $213 billion. A line running above the stacked bars shows the total CAGR for the 2014–19 period is 8%, and the CAGR of nonlife GWP is 9.6% for 2014 to 2019 and 7.5% for life premiums. The total CAGR for the 2019–24 period is 11%, and the CAGR of nonlife GWP is 10.3% for 2014 to 2019 and 12.2% for life premiums. Note: Numbers recalculated using fixed foreign exchange (FX) rates from 2024 (except Argentina, which used 2022 fixed FX rates for the 2014–22 period) and annual average rates from each year for 2023 and 2024 to eliminate the effects of currency and inflation volatility. Source: Latin America country regulators and McKinsey analysis. End image description

To gain deeper insight on the trends shaping insurance across the region, we interviewed several senior executives from leading insurance companies across Latin America. Five common themes emerged:

• Customers’ behavior is changing as they demand simpler, faster, and “useful” solutions. As one executive said, “Customers want simpler communication and products that they can understand. As an industry, we need to focus on the simplification of the offering.”
• The user experience is critical as customers look for highly personalized, seamless journeys. “Customers are more demanding, and experience became essential,” one leader said. “The experience offered by insurers today is inferior to other industries.”
• Carriers must be disciplined about costs and efficiency to capture full value. “The battle for operational efficiency is critical and is at the top of the industry’s agenda,” an executive said. “The big challenge is to give the right focus.”
• AI and technology are emerging as key enablers to accelerate needed change. “Technology is being a driver for better journeys and has offset the high cost of some parts of the value chain,” another leader said. “It is a common denominator.”
• Distribution has emerged as the critical unlock for the region. “Distribution is dynamic,” a leader said. “We should expect increasing levels of digitalization across all existing channels.”

While all are important, we believe distribution is the crucial catalyst for accelerating the ongoing transformation of Latin America’s insurance market. That is because penetration rates remain comparatively low, and there are actions carriers can consider to increase consumer adoption and maintain the region’s strong growth.

A distribution environment poised to expand

The mix of channels through which insurance is sold across Latin America has barely shifted in recent years, with a handful of channels remaining at the forefront (Exhibit 2).

Image description This chart presents gross written premium (GWP) data for life and non-life products by distribution channel for Chile, Brazil, and Mexico in the 2015–23 period. There were no major shifts in the distribution channel mix in these countries, although there were subtle changes, especially in nonlife products. In Chile, the distribution channels for life products were unchanged in the time period, with 85 to 90% of distribution driven by brokers and agents. The remaining 10 to 15% of life GWP were distributed through bancassurance and affinity. For nonlife products, direct sales (10 to 15%) was steady. Brokers and agents (50 to 60%) grew slightly, and bancassurance and affinity (25 to 30%) shrunk slightly. In Brazil, distribution of life products was largely unchanged: 20 to 25% of products are distributed by brokers and agents, with 75 to 80% by bancassurance and affinity and less than 1% by direct sales. The sales mix of non-life products was also unchanged for the period. Brokers and agents sold 80 to 85% of non-life products, bancassurance and affinity 15-20%, and direct sales less than 1%. In Mexico, direct sales in life insurance grew from 2 to 5% to 5 to 10%, but stayed at 1 to 5% in nonlife. Premiums written through brokers and agents was 70 to 75% in 2015 but declined to 60 to 65% by 2023, while bancassurance and affinity held 20 to 30% of the market in 2015 but 25 to 30% in 2023. In nonlife, brokers and agents expanded their share from 70 to 75% in 2015 to 80 to 85% in 2023 by taking business from bancassurance and affinity, whose market share fell from 25 to 30% in 2015 to 15 to 20% in 2023. Note: Agents include dependent and independent agents. Direct sales includes digital channels, call centers, and branches. Source: Local regulator data from Brazil, Chile, and Mexico and McKinsey analysis. End image description

Brokers and agents

Brokers and agents still account for about 60 to 65 percent of the region’s premiums and are highly fragmented, with more than 210,000 in the region. That number grew by 8 percent annually from 2019 to 2023. But the sector has been experiencing a wave of consolidation as global and local players increase their presence through mergers and acquisitions—in Brazil alone, there were 45 such deals from 2021 to 2023. Brokers are also expanding their product portfolios to include life insurance and other financial services, leveraging their customer relationships to offer a broader range of products.

Bancassurance

Bancassurance is a relevant channel in Latin America, accounting for up to 80 percent of life and pension distribution in countries such as Brazil and up to 25 percent of nonlife products in markets such as Chile. While the channel benefits from banks’ established customer relationships and extensive reach, there remains considerable potential for growth by expanding the available product portfolio and improving the customer experience. For example, 50 percent of banked individuals do not have insurance products, even though 90 percent of uninsured consumers say they would be willing to buy insurance from their banks.

Affinity partnerships and embedded insurance

Affinity partnerships—which involve collaborations between insurers and nontraditional partners such as retailers, telcos, and travel companies—are gaining traction, with most of these companies already offering insurance products. These partnerships allow insurers to embed their products into partners’ customer journeys, creating seamless and convenient insurance purchasing experiences. This channel has evolved to include a wide range of products, from extended warranties on electronics to travel and pet insurance. This B2B2C model has demonstrated considerable potential, with some best-in-class players achieving high conversion and penetration rates. For example, approximately 50 percent of some electronics categories are being sold together with an insurance product.

Digital direct

While digital direct remains a small part of the distribution mix, its growth has accelerated across business lines. Digital channels are especially relevant in the initial phase of the purchasing process, in which clients seek product information and pricing, but they are less relevant in purchasing decision-making stages, in which advisory is key.

Significant change within channels

Evolving customer behavior, technological advancements, and a need for greater efficiency are creating substantial change within channels. For example, more than 60 percent of Latin American insurance consumers would like to have a hybrid insurance journey, using both self-service and assisted support along the different steps of any specific process, such as purchasing. Also, more than 90 percent of consumers seek more than one quote when buying insurance, according to a recent McKinsey Latin America Bancassurance Survey.¹Based on McKinsey’s Latin America Bancassurance Survey of 7,000 people across the region during the second half of 2024.

Consumers also value different attributes across channels. For example, when it comes to personal insurance lines, they have higher confidence in banks as a brand, believe brokers provide better customization and advice, and regard digital as providing a superior customer experience and more competitive prices (Exhibit 3). Building on the strengths, relevance, client perception, and newly available technology of each distribution channel creates the potential to unlock the next chapter of growth.

Exhibit 3 Image description This exhibit presents customer perception of different insurance distribution channels, based on their most-chosen response to survey questions about the attributes of products and services. Consumers said banks were the channel that gave them confidence. On the product dimension, consumers said digital channels offer the lowest price, banks the best benefits, and brokers greater customization. On service dimensions, customers said digital provided a simpler journey, while banks provided better support. Source: McKinsey Latin America Bancassurance Survey of 7,000 consumers, conducted in the second half of 2024. End image description

Five ways to empower channels and accelerate growth in Latin America

While insurance has grown strongly across Latin America in recent years—exceeding prepandemic levels—more can be done. Players in the region can consider five actions to further unlock growth and capture the market’s full potential:

1. Committing to embedded insurance. This includes collaborating with a broader range of partners, including midsize companies and emerging digital platforms, to embed insurance products into various customer journeys. This approach can help insurers reach new customer segments and create innovative distribution models.
2. Enabling omnichannel experiences. This involves ensuring seamless insurance journeys that integrate both digital channels (such as when a customer is exploring products) and human interaction (for example, by providing highly qualified advice and specific assistance).
3. Powering channels with technology and AI. This entails enhancing a channel’s efficiency and effectiveness through better tools and real-time assistance. For example, investing in digital capabilities and providing platforms for customer relationship management and support through AI and gen AI can help better serve clients and expand reach. This includes adopting AI and data analytics to target specific clients, refine offers, and develop new approaches.
4. Leveraging personalization. This entails unlocking profitable coverage by offering the products consumers need when they most need them, coupled with effective pricing capabilities. Providing more personalized services increases both penetration and satisfaction.
5. Investing in trust-based relations. This involves increasing penetration simply by ensuring consumers know and understand the products available to them—and why they can be critical. Carriers can invest in education to raise awareness about products and insurance generally.

The Latin American insurance market has grown strongly in recent years. But it can continue to expand and transform by empowering brokers, enhancing bancassurance, widening affinity partnerships, and embracing digital channels. By doing so, insurers can generate new opportunities and better serve their customers in this dynamic and rapidly changing market.