Latin America is a dynamic insurance market, characterized by sustained growth and strong profitability (Exhibit 1), as well as relatively low insurance penetration, suggesting considerable room for expansion. At the same time, Latin American insurers have the opportunity to strengthen distribution and improve operational efficiency. Capturing both market growth and operational improvements could unlock the next S-curve of growth and performance.
Latin America stands out for both insurance growth and returns.
While annual premiums growth has been around 12 percent over the past five years, it slowed to 4 percent in 2025.1 Brazil, historically the region’s largest insurance market, was a primary driver of the slowdown, in part because of regulatory changes affecting pension contributions. Most markets in the region have sustained their recent growth, with annual premiums increasing 9 percent in Colombia, 11 percent in Mexico, and 12 percent in Chile between 2024 and 2025.2 At the product level, health and individual life insurance have been among the strongest-growing segments, while motor and other property and casualty insurance have broadly tracked overall historical growth. Home insurance, historically a high-growth segment, has been decelerating, while pension insurance declined more sharply following the regulatory change in Brazil (Exhibit 2).
Latin America’s insurance market retains strong pockets of growth.
1Compulsory insurance covering injury resulting from motor vehicle accidents; product names and coverage requirements vary by market.
Profitability remains attractive, with margins stabilizing at about 7 to 8 percent of premiums after the COVID-19 pandemic (Exhibit 3), largely supported by higher investment income. Underlying insurance performance, however, has improved more modestly. Insurers are navigating an evolving cost environment, shaped by inflation and rising labor costs driven by labor reforms and minimum wage adjustments in several Latin American countries. At the same time, elevated interest rates in the region have supported insurers’ profitability, reducing some of the pressure to improve the performance of their core operations. However, given the potential for cost pressures, greater operational efficiency will become increasingly important to protecting margins and sustaining profitable growth. AI offers insurers new levers to achieve these goals.
Latin American insurers’ margins have recovered from pandemic-era lows.
In this article, we explore how AI could help Latin American insurers build on the region’s growth momentum. First, we show how customer behavior and distribution are evolving as consumers combine digital convenience with a continued need for human advice. Then, we consider how AI could help insurers make insurance easier to buy and sell, improve underwriting and claims efficiency and accuracy, and simplify the operating backbone. Finally, we examine how insurers can capture the full value of AI by rewiring how they operate around an agentic operating model.
Evolving customer relationships and expectations
Insurance in Latin America is largely sold through traditional channels. Brokers and agents3 account for roughly 80 to 90 percent of non-life-insurance distribution in markets such as Brazil and Mexico. Banks remain particularly important in life insurance and pensions. In Brazil, for example, they account for roughly 70 to 80 percent of life insurance sales.
But traditional distribution doesn’t necessarily mean traditional customer behavior. Latin American consumers are evolving not only in how they learn about products and decide what to purchase but also in how they engage with various channels and seek assistance.
Globally, customers are already using gen AI–powered tools to shop for insurance. A survey by an international association of insurance companies found that across six large countries, 68 percent of the customers polled reported using gen AI assistants such as ChatGPT in the insurance purchasing process.4 Latin American consumers also appear receptive to AI-enabled financial advice. According to a McKinsey survey, seven out of ten retail banking customers in Brazil said they would feel secure receiving a financial recommendation from an AI advisor, and 46 percent would prefer using AI to learn more about financial products.5
As these tools mature into agentic commerce, where AI assistants can compare options and complete a purchase on the customer’s behalf, the point of discovery moves upstream to the answer an AI assistant provides before a customer engages with brokers or agents. As adoption grows, insurers may need to consider how their products are represented in AI-generated answers, particularly if AI assistants become a more important point of discovery and comparison.
Insurers are beginning to capture this emerging demand. Spanish digital insurer Tuio, which plans to expand into Latin America,6 reports that about 20 percent of its new customers arrive through AI assistants, and they convert at roughly four times the rate of those coming through Google search.7 Tuio has taken this channel a step further, moving from AI-enabled discovery toward AI-enabled distribution through a dedicated ChatGPT app that empowers consumers to obtain personalized, indicative home insurance quotes directly within the ChatGPT conversational interface before redirecting them to its website to complete the purchase.
Intermediaries, for their part, increasingly engage customers through a hybrid journey. Across five major Latin American markets, about 70 percent of insurance brokers’ and agents’ interactions with customers are already remote.8 However, the shift to digital hasn’t diminished the need for personal guidance. Consumers value the convenience of handling straightforward tasks digitally, while seeking human support when insurance products become difficult to understand or decisions carry significant consequences. About 83 percent of uninsured consumers in Latin America say they want support when purchasing insurance, underscoring the importance of human advice.9
AI could transform how insurers grow and compete
AI can support activities across much of the insurance value chain, including in customer acquisition, pricing, claims processing, customer service, and technology modernization, with humans remaining in the loop to provide oversight and make critical decisions. Customers could gain easier access, faster service, and advice tailored to their needs; brokers and other intermediaries could gain better tools and more time to focus on the interactions where they add the most value; and insurers could use AI to free up capacity and redirect resources toward growth opportunities and operational improvements.
For insurers specifically, the impact can span both sides of the profit equation, lifting the top line by widening access and improving conversion, while strengthening the bottom line by streamlining operations. For a market that has historically leaned on investment income to sustain margins and now faces increasing cost pressures, that combination offers a window to strengthen core insurance operations.
Insurance protection gaps in Latin America leave many individuals and households financially vulnerable to unexpected events. AI could help insurers narrow these gaps by improving operational efficiency, reducing the cost of serving customers, and making insurance products more accessible and tailored to consumer needs. By potentially expanding access to insurance and helping to narrow coverage gaps, AI could help unlock up to $15 in additional annual insurance premiums per capita, compared with the roughly $300 currently spent on insurance per person across the region.10
Latin America’s insurance industry generates annual profits of about $15 billion to $20 billion. Our analysis suggests that, under certain adoption and implementation assumptions, AI could expand the insurance industry profit pool in Latin America by an estimated $3 billion to $5 billion. The outcomes would depend on insurers’ starting points, the scale and effectiveness of implementation, and broader market conditions.
In short, AI can help insurers reach and serve customers more effectively, strengthen their risk assessment capabilities, and improve operational efficiency.
Make insurance easier to buy and sell
The opportunity begins with distribution. Agents, brokers, and other distributors play a critical role not only in providing advice but also in helping customers navigate complex products. Yet insurance professionals frequently lack the information, tools, and time needed to provide highly personalized advice to every customer.
Insurance agents and brokers in Latin America spend less than half of their time on sales,11 limiting their capacity for high-value customer interactions. AI-enabled tools could help address this challenge by reducing administrative burdens and freeing up more time for advising and selling. A McKinsey survey of brokers and agents in Latin America12 identified a small group of top performers with significantly higher adoption of digital channels, conversion rates, and cross-selling penetration than their peers (Exhibit 4). The survey highlighted performance gaps that digital and AI-enabled tools could help narrow, though it didn’t specifically address how extensively the top performers are using AI. Equipping more insurance professionals with such capabilities could help shift more of their time toward sales, potentially bringing their results closer to those of today’s top performers.
High-performing insurance brokers and agents outshine their peers across key metrics.
Note: Analysis focuses on the fragmented segment of the insurance brokerage market, comprising primarily small and independent brokers and agents.
AI tools can take on administrative work handled by these brokers, helping to identify promising leads, suggesting products that fit a customer’s circumstances, and surfacing relevant information in real time during client conversations. As technology handles more of the preparation and routine processing, people may be able to spend more time on interactions where their judgment and advice matter.
The aim is to give agents and brokers capabilities that were previously difficult to provide at scale. Globally, AI applications in distribution could improve sales agent productivity by around 15 percent, while some applications could increase the rate at which customer contacts turn into quotes by 15 to 20 percentage points, our analysis suggests.
For Latin America, this matters beyond sales productivity. By making insurance products easier to understand, identifying unmet protection needs, and enabling more relevant advice at lower cost, AI could help insurers narrow the region’s persistent protection gap. Affordability and complexity remain hurdles to purchasing insurance: 36 percent of uninsured consumers in Latin America say they would consider buying insurance if more affordable and flexible payment options were available.13 Meanwhile, the complexity of the purchasing process is reflected in the time it takes to complete a transaction, with about 60 percent of consumers in the region taking more than a day to complete an insurance purchase end to end.14
By reducing the cost of serving customers and enabling more personalized products and pricing, AI could help insurers reach consumers who have historically been difficult to serve economically. This could make simpler, embedded, and lower-ticket microinsurance offerings more viable, opening new pools of demand and extending coverage to more consumers.
Strengthen the core and modernize the backbone
AI can improve some of the core decision-making at the heart of insurance. Many Latin American insurers still rely on underwriting and pricing processes that are largely manual and cannot adjust quickly to changing market conditions or new information about individual risks. By rewiring underwriting workflows with AI, insurers could analyze information faster, automate straightforward underwriting decisions, and identify changes in portfolio performance earlier.
AI can also improve customer experience, efficiency, and accuracy in claims. In a McKinsey survey of Latin American consumers, policyholders who reported having experienced a fast and transparent claims process renewed at rates that are 40 percent higher than those who didn’t,15 meaning better claims handling aids retention as much as efficiency. Latin American insurers pay roughly $75 billion annually in non-life-insurance claims, still largely processed through manual document handling, assessment, and fraud checks. AI could reshape processes by, for example, assessing damage from photographs or video, flagging potentially fraudulent claims for review, and accelerating the settlement of legitimate claims. Done well, this could result in lower claims-handling costs, improved accuracy of claims assessments, and a faster, simpler process for customers. More effective fraud detection could also help insurers reduce unwarranted payouts.
Aviva, the United Kingdom’s largest general insurer, rewired its end-to-end claims journey with AI while retaining human interaction where appropriate, including for personal-injury claims. The transformation reduced the average time required to assess liability in complex cases by 23 days and improved routing accuracy by 30 percent, while helping to reduce customer complaints by 65 percent and boost customer satisfaction scores more than sevenfold.
The opportunity behind the scenes is significant, too. Many Latin American insurers continue to operate with fragmented processes, substantial manual work, and aging technology. More than two-thirds of surveyed Brazilian insurers cite integration with legacy systems as a top challenge to AI expansion.16 These constraints contribute to a relatively expensive operating model: Administrative costs for Latin American property and casualty insurers average about 19.5 percent of net earned premiums, compared with 14.5 percent in the United States.17
Agentic AI could help insurers improve operational efficiency by processing documents, handling routine service requests, and coordinating work across back-office functions, freeing employees to focus on activities that require human judgment. AI agents could also help accelerate the modernization of core technology processes and systems. In Brazil, 68 percent of insurers expect some processes to be fully automated within five years.18
Capturing the full value, however, will require more than layering AI onto today’s processes. Automating fragmented or unnecessarily complex workflows may perpetuate existing inefficiencies rather than resolve them.
Rewiring the Latin American insurer to help unlock value
Realizing the full value of AI means changing how insurers operate. Applying AI to individual tasks while keeping today’s processes intact may generate incremental benefits, but it is unlikely to capture AI’s full potential. The larger opportunity is to redesign processes around what AI and human workers can each do best, integrate applications across the enterprise, and rewire the organization with AI.
The cornerstone of this approach is an agentic operating model. Rather than using AI primarily to inform individual decisions or automate discrete tasks, insurers could deploy a digital workforce of AI agents that can reason, decide, and execute complex workflows end to end. Human roles could evolve accordingly, with employees setting objectives, exercising judgment, overseeing agents, and remaining accountable for outcomes.
Ominimo, a fast-growing European insurtech, illustrates the potential of a technology-driven operating model in a highly standardized and price-sensitive market. Launched in Hungary in 2024, the company has focused on advanced pricing and operational capabilities, enabling it to offer premiums that are as much as 30 percent lower than the Hungarian market average.19 With only about 130 employees, roughly two-thirds in engineering and data science,20 Ominimo captured approximately 7 percent of the Hungarian motor insurance market within its first year21 and expanded into the Netherlands, Poland, and Sweden.22 For Latin American insurers, this example points to a broader opportunity: using technology to lower the cost of serving price-sensitive customers and potentially extend coverage to segments that have historically been difficult to reach economically.
Insurers don’t need to rewire the whole enterprise at once. They can start with one or two high-value domains and reimagine them end to end, bringing together the workflows, technology, data, talent, and governance required to deliver a measurable business outcome. They can then use the capabilities and lessons developed in those domains to progressively expand the transformation across the enterprise.
Insurers may need to redesign how work is organized, moving toward efficient, empowered, multidisciplinary teams that own outcomes end to end. Employees could increasingly act as supervisors and orchestrators of AI agents, ensuring that various workflows operate effectively, responsibly, and in line with strategic priorities.
This shift will also likely require new capabilities, roles, governance, and cultural norms. Insurers will need to build capabilities to design and govern agentic workflows, manage risk and accountability, and enable employees to work effectively alongside AI. A culture of experimentation and rapid learning will be essential as organizations identify where humans and AI can each create the most value.
Ultimately, success among Latin American insurers is likely to accrue not to institutions that run the most AI pilots, but those that move decisively to redesign full domains, using AI as a durable engine for growth, scale, resilience, and differentiated customer value.
Latin America’s insurance industry already has strong growth momentum. The next challenge is to turn that growth into broader coverage, better customer experiences, and a stronger underlying insurance business. AI can help by making insurance easier to buy and sell, boosting channel productivity, improving risk decisions and claims, and taking work out of the back office. Getting there will take more than adding AI tools to the way insurers work today. Insurers will need to rethink their operating model to truly rewire the organization around processes, technology, data, and talent. Those that do could find new ways to reach customers, serve them better, and operate more efficiently, helping open the next chapter of growth.
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