A fast-developing hub for commercial interests, Latin America


presented unique opportunities and challenges. Each country had not only diverse political and economic situations, but also varied geographies and climates, which meant very different risk-coverage requirements. The mix of immigrants was felt in the variety of insurance companies catering to their needs. In Argentina for example, companies such as La Anglo-Argentina, La Franco-Argentina, La Germano-Argentina and the Instituto Italo-Argentina were founded by immigrants.


However, local companies often struggled against the powerful


overseas competition and were usually in need of substantial reinsurance backing, which, for European companies, was much easier to obtain in their home countries. This was where specialised reinsurers such as Swiss Re played an important role in backing the development of a local insurance industry.


In over a century of work in Latin America, Swiss Re has played


a vital role in helping to maintain efficient, fair and stable insurance markets. These, in turn, have aided the economic development of the region. On numerous occasions, the company has provided funds that have contributed to recovery and reconstruction efforts following natural catastrophes, and we are proud to continue to play our part in protecting Latin America’s unique cultures.


Between 1900 and 1910, driven by the exports of metals and textiles all


over the world, insurance premiums in the country quadrupled. And in 1911—100 years ago—Swiss Re signed its first Latin American contract. The Mundial Compania de Seguros y Reaseguros, founded the previous year, and an affiliate of Swiss Re, Prudentia, entered into a fire reinsurance contract. This was an important step for the local insurance sector and also marked the beginning of Swiss Re’s long history in the region.


A CHANGING WORLD The outbreak of World War I saw a number of companies scale


back their Latin American operations, but Switzerland’s position as a neutral country during the conflict, coupled with Swiss Re’s conservative reserving policy, made it possible for the company to emerge from the troubles without suffering overly adverse consequences and to continue its expansion.


But by the 1930s a global depression presented a fresh set of challenges


for those wishing to do business in Latin America. As countries sought to protect their interests and safeguard fragile economies, an internal development phase took over. In the insurance sector, this meant the promotion of national companies and various forms of restrictions for foreign-domiciled competitors.


Many countries underwent profound change with the creation of local insurance and reinsurance monopolies. In Argentina, Brazil and Chile, the nationalisation trend peaked in the following years: INDER in Argentina (1925), Caja in Chile (1927) and the IRB in Brazil (1939). While the


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motivation for promoting these national companies was based on good intentions, the fact that domestic reinsurance companies could not survive without themselves using reinsurance abroad was overlooked.


In many cases, state-owned reinsurers were formed. But these companies


also struggled to exist without international risk compensation. Just as World War I had, World War II also had a major impact on


both Latin America and the insurance industry there. During and after World War II, Latin American trade steered away from Europe towards the US. Many contracts were renegotiated or ended for political reasons, but Switzerland’s neutral status during the conflict meant that Swiss Re lost almost no contracts and picked up several.


By 1946, most insurers and reinsurers were increasingly convinced


that industrial and commercial development in Latin America would not be possible without an effective insurance system. That year, at the first Hemispheric Insurance Conference, held in New York, the first step was taken to create the Inter-American Federation of Insurance Companies (FIDES). The organisation would become a driving force in the development of the region.


While still broadly protectionist in its overall structure, Latin America


achieved growth of more than 6 percent between 1950 and 1980 in the industrial sector.


The risks grew and became clearer. The increasing physical health


of some markets necessitated additional backing in the life insurance business. Major engineering projects emerged to build refineries, bridges and other large-scale industrial facilities. Infrastructure for air and other forms of transport was developed, leading to a large increase in liability insurance for vehicles. Individual insurance companies were unable to meet these challenges themselves; hence demand for advice on liability and for support for Latin American clients in evaluating risks increased.


In the 1950s, therefore, Swiss Re developed its network of advisory


services, focusing especially on Latin American markets. As an international reinsurer with broad experience, Swiss Re was in a position to better evaluate risk and to offer appropriate technical insurance and reinsurance solutions.


The strategy bore fruit. As far back as 1953, Swiss Re succeeded in conducting large-scale operations in Central America. The company entered into contracts in Guatemala, Nicaragua (1953) and in the Dominican Republic (1955), and it began operations in El Salvador in 1959 and in Honduras in 1964. The number of Swiss Re’s cedants and contracts thus increased.


In the 1970s and 1980s, the growing differentiation in the Latin American


market led Swiss Re and some of its competitors to provide more services. The company was already operating in nearly all sovereign countries in the region, with only a few exceptions, such as Cuba. International insurance groups were dominating the Latin American market.


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