South America Insurtech Market Outlook, 2030

The South American insurtech market is undergoing a notable transformation, driven by rising digital adoption, increasing urbanization, and the urgent need to bridge the region's longstanding protection gap. A large portion of the population remains uninsured or underinsured, with nearly 70% of vehicles lacking insurance and limited uptake of life or health coverage, particularly among lower-income groups. This unmet demand, combined with the widespread use of smartphones and the internet, has set the stage for insurtech firms to provide digital-first solutions such as microinsurance, pay-as-you-go models, and embedded insurance at the point of sale.

Urbanization is further fueling this shift, as more people migrate to cities like São Paulo, Buenos Aires, and Bogotá, creating a dense customer base that is digitally connected and in need of agile insurance offerings. Many insurtechs now partner with e-commerce platforms, telecommunications providers, and financial institutions to offer seamless and targeted insurance experiences directly to users through mobile applications and online portals. The use of social media, digital advertising, and influencer marketing has also grown, particularly to appeal to younger, tech-savvy urban dwellers.

Brazil, the largest and most mature insurtech market in South America, has introduced regulatory sandboxes and flexible guidelines for digital policies, enabling startups to experiment with innovative insurance models under controlled conditions. Mexico has enacted a comprehensive Fintech Law that supports electronic insurance distribution, while Colombia, Peru, and Chile have also implemented frameworks that ease digital policy issuance and cross-border insurance operations. These regulatory innovations reduce the barriers to market entry and encourage greater investment, product development, and cross-national expansion.

According to the research report, "South America InsurTech Market Outlook, 2030," the South America InsurTech market is anticipated to add to more than USD 5.71 Billion by 2025-30. The rapid adoption of mobile technology and digital payments in countries like Brazil, Colombia, and Argentina has empowered insurtechs to introduce user-friendly platforms, offer bite-sized policies, and utilize real-time data for underwriting and claims management. Another crucial factor is the underserved population across South America. Many individuals and small businesses have historically been excluded from formal insurance services due to high premiums, lack of awareness, or geographic barriers.

Insurtechs have responded with microinsurance products, usage-based auto coverage, and pay-as-you-go health and life policies, making protection more inclusive and affordable. Brazil, for example, has become a regional leader with over 200 active insurtechs and a supportive stance from SUSEP, the national insurance regulator. These frameworks allow new models to be tested before full regulatory approval, reducing risks for both startups and investors. Furthermore, partnerships between insurtech firms and traditional insurers, banks, e-commerce companies, and telecom providers have created strong distribution channels and enhanced the scalability of innovative products.

These collaborations help insurtechs tap into large existing customer bases and deliver embedded insurance directly at points of sale such as when buying a phone or booking a ride. The rise of the gig economy, digital freelancing, and e-commerce also increases the need for flexible and on-demand insurance services. Additionally, natural disaster risks, such as floods, earthquakes, and hurricanes, have spurred interest in climate-resilient insurance models, particularly parametric insurance powered by real-time data and smart contracts. Events such as Fintech Week Latin America and Insurtech LatAm Forum further support ecosystem development, providing platforms for networking, collaboration, and investment.

Market Drivers

• Expanding Mobile Connectivity and Fintech Ecosystem: One of the strongest drivers of the InsurTech industry in South America is the region’s rapid expansion of mobile internet access and the booming fintech ecosystem. Countries like Brazil, Colombia, and Mexico (often grouped with Latin America) have seen a sharp rise in smartphone usage and digital payment adoption, especially among young, urban populations. This mobile-first behavior supports the growth of digital insurance platforms that offer seamless policy management, claims filing, and customer support. The strong fintech foundation driven by neobanks, mobile wallets, and digital credit platforms creates natural synergies for InsurTech firms to embed insurance services, expand distribution, and offer flexible microinsurance products tailored to underbanked and informal workers.
• Rising Middle Class and Insurance Awareness: As economies like Brazil, Chile, and Peru develop, the region is witnessing the gradual rise of a middle class with increasing awareness of financial protection and healthcare needs. More consumers are recognizing the importance of insurance for life, health, vehicles, and property. This cultural shift is driving demand for innovative, affordable, and easy-to-access insurance solutions. InsurTech companies are responding by offering low-premium policies, on-demand coverage, and AI-powered claims services. The growing appetite for digital financial products among urban populations especially millennials and Gen Z acts as a powerful tailwind for the industry’s growth.

Market Challenges

• Regulatory Instability and Fragmentation: One of the most significant challenges facing the South American InsurTech market is inconsistent and fragmented regulation across the region. Each country operates under different insurance laws, licensing requirements, and supervisory frameworks. Moreover, in several countries, regulations have not evolved to accommodate digital insurance models, creating uncertainty for startups trying to enter or scale. For instance, in some jurisdictions, the use of digital-only policies or third-party digital platforms is still subject to heavy scrutiny. The lack of harmonized digital insurance policies across borders makes regional expansion difficult and deters foreign investment.
• Low Insurance Penetration and Trust Deficit: Despite the growing demand for financial services, insurance penetration remains relatively low in much of South America. Millions of people especially in rural areas still lack access to or awareness of insurance products. This is partly due to historical mistrust in financial institutions, limited insurance literacy, and perceptions of high costs or complex policy terms. For InsurTech firms, acquiring customers in these markets is challenging and often requires significant investment in education, outreach, and digital onboarding infrastructure. Without targeted efforts to build trust and demystify insurance, growth in underserved communities’ remains slow.

Market Trends

• Embedded Insurance through E-commerce and Mobility Platforms: Embedded insurance is rapidly gaining traction in South America, particularly through partnerships with digital platforms in e-commerce, mobility, and logistics. Online marketplaces like Mercado Libre, ride-sharing services like Uber, and last-mile delivery startups are integrating insurance into their offerings such as product protection, accident insurance, and gig worker health coverage. This trend is creating a new channel for insurance distribution, making coverage more accessible and relevant at the point of transaction. For InsurTech startups, these partnerships offer a cost-effective way to reach vast customer bases and tap into previously uninsured demographics.
• Use of AI and Automation to Improve Claims and Underwriting: Artificial Intelligence and automation technologies are transforming the way insurance is delivered in South America. InsurTech firms are adopting AI for fraud detection, personalized pricing, risk scoring, and customer service chatbots. Automated claims processing - particularly for motor and health insurance - is helping reduce paperwork, minimize delays, and improve customer satisfaction. In Brazil, where InsurTech adoption is most advanced, companies like Thinkseg and 88i are leveraging AI-driven platforms to optimize underwriting and enable pay-as-you-go or usage-based models. This shift toward automation is not only reducing operational costs but also driving transparency and efficiency in the insurance process.

Travel insurtech is rapidly growing in the South America insurtech industry due to increasing cross-border tourism and a rising middle class seeking affordable, digital-first insurance solutions tailored to unpredictable travel conditions in the region.

The rapid growth of travel insurtech in South America can be attributed to the region's expanding tourism industry, the digital transformation of financial services, and a growing demographic of middle-income consumers who are more travel-savvy and tech-oriented than ever before. Countries such as Brazil, Argentina, Chile, and Colombia have witnessed resurgence in both inbound and outbound travel, driven by relaxed visa policies, budget airline expansions, and a surge in international and domestic tourism following the post-pandemic rebound.

This shift has created a demand for flexible, real-time insurance solutions that cater to the evolving needs of travelers, including coverage for trip cancellations, medical emergencies, lost luggage, and travel disruptions caused by political unrest, natural disasters, or airline strikes risks that are relatively common in the region. Traditional insurance providers often lag in offering the agility and transparency travelers now expect, paving the way for digital-native insurtech startups to thrive. These insurtech platforms leverage AI, mobile applications, real-time data, and seamless digital onboarding to create a frictionless customer experience, from quote generation to claims processing.

Moreover, partnerships with travel agencies, airlines, fintech apps, and online booking platforms enable these insurtech providers to embed insurance offerings directly at the point of purchase, increasing both visibility and accessibility. The rising smartphone penetration and improved internet infrastructure across South America have also played a crucial role in fostering the adoption of mobile-based travel insurance services. Governments and regulatory bodies in the region are increasingly supporting fintech and insurtech innovation through sandbox initiatives, digital ID systems, and open banking frameworks, which enhance data-sharing capabilities and consumer trust.

Customer Experience Management (CEM) is the fastest growing application type in the South America insurtech industry due to the increasing demand for personalized, responsive, and digital-first engagement amid rising customer expectations and intense market competition.

In South America's rapidly evolving insurtech landscape, Customer Experience Management (CEM) has emerged as the fastest growing application segment, driven by the urgent need to redefine how insurers interact with customers in a digital-first world. As consumer expectations shift toward more personalized, real-time, and seamless interactions fueled by experiences with retail, fintech, and e-commerce traditional insurance models are proving insufficient. In response, insurtech firms are adopting advanced CEM tools to enhance user satisfaction, loyalty, and retention.

With the region experiencing widespread smartphone adoption, growing digital literacy, and an expanding middle class, insurance consumers now demand more than just coverage they expect proactive communication, intuitive self-service options, quick claims processing, and tailored policy offerings. Customer experience tools powered by artificial intelligence, machine learning, and predictive analytics enable insurers to gain deep insights into customer behavior and preferences, helping them deliver highly targeted and timely services.

Furthermore, South America's insurtech companies are increasingly leveraging omnichannel strategies, integrating chatbots, mobile apps, voice assistants, and social media to engage customers across multiple touchpoints. This is particularly important in a region with diverse languages, cultures, and customer expectations, where personalization is key to building trust and long-term relationships. Real-time feedback mechanisms and sentiment analysis also empower companies to continually refine their services and quickly address customer pain points.

Additionally, fierce competition among emerging insurtech startups and incumbent insurers has made superior customer experience a key differentiator in the market. Startups are focusing on frictionless onboarding, transparent communication, and responsive service as core value propositions, challenging legacy insurers to adapt or risk losing market share.

AI & ML technologies are the fastest growing in the South America insurtech industry due to their transformative ability to automate underwriting, personalize offerings, and enhance fraud detection, all while improving operational efficiency in a competitive and evolving digital landscape.

The rapid adoption of Artificial Intelligence (AI) and Machine Learning (ML) in South America’s insurtech industry is being driven by their unmatched potential to address longstanding inefficiencies and deliver smarter, data-driven insurance solutions. In a region where traditional insurance operations have often struggled with slow claims processing, high fraud rates, and low customer engagement, AI and ML offer transformative capabilities that are reshaping the industry.

These technologies enable insurtech firms to automate critical functions such as underwriting, claims evaluation, and policy pricing by leveraging vast amounts of structured and unstructured data from diverse sources like social media, IoT devices, telematics, and customer interaction histories. This data-driven approach not only enhances accuracy and speed but also facilitates real-time decision-making, thereby reducing costs and improving user satisfaction.

In a market like South America marked by economic volatility, varied regulations, and uneven access to financial services AI & ML provide the flexibility to tailor products for niche segments, such as gig workers, microinsurance users, or rural populations, helping to drive financial inclusion. Additionally, fraud remains a major concern for insurers across the region, and AI-powered algorithms have become essential in identifying suspicious patterns, anomalies, and inconsistencies in claims, minimizing financial losses and strengthening trust.

The increasing digitization of consumer behavior, combined with mobile-first adoption across countries like Brazil, Argentina, and Colombia, has also created fertile ground for AI-driven personalization in customer service and product recommendations. Chatbots, intelligent virtual assistants, and automated claims processors powered by NLP (Natural Language Processing) are enhancing customer experience while reducing human error and workload.

Managed services are moderately growing in the South America insurtech industry due to the increasing need for scalable IT infrastructure, cost-effective operations, and specialized expertise without the burden of in-house management in a developing digital ecosystem.

Managed service providers (MSPs) step in to fill this gap by offering end-to-end support for IT operations, cloud management, application hosting, cybersecurity, and network services. This outsourced model enables insurtech firms to focus on innovation, customer engagement, and core business functions, while leaving complex and time-consuming backend operations to specialized providers. South America’s insurtech growth is still in a maturing phase compared to more developed regions, and many companies are in the early stages of scaling. For them, managed services offer a flexible and cost-efficient pathway to access advanced technologies without making heavy upfront investments in infrastructure or skilled personnel.

The moderate pace of growth also reflects a cautious approach to outsourcing, as some insurers prefer hybrid models - balancing internal control with external support. Additionally, regulatory requirements around data localization, privacy, and cybersecurity are evolving in South American countries like Brazil and Chile, prompting firms to seek MSPs that can ensure compliance while adapting quickly to shifting policy landscapes. Managed services are particularly attractive for handling legacy system integration with modern platforms - an essential step for traditional insurers transforming into digital-first players.

Moreover, the rise of cloud-based platforms and SaaS (Software-as-a-Service) solutions in the region has increased demand for managed services that can monitor, maintain, and secure these environments in real-time. However, challenges such as budget constraints, trust in third-party providers, and regional disparities in digital readiness limit the pace of adoption, resulting in moderate rather than explosive growth.

The insureds end user type is moderately growing in the South America insurtech industry due to rising digital awareness and expanding insurance access, tempered by affordability issues and lingering trust barriers among underserved populations.

In recent years, insurtech platforms have made notable strides in reaching previously underserved populations across the region by offering more accessible, affordable, and user-friendly insurance products through mobile apps, digital wallets, and online portals. Countries like Brazil, Colombia, and Chile are witnessing a steady rise in smartphone penetration and internet connectivity, empowering more individuals to explore and purchase insurance products digitally. This is particularly significant in a region where traditional insurance models have historically excluded large segments of the population due to complex processes, high premiums, and lack of financial literacy.

Insurtechs are bridging these gaps by offering microinsurance, usage-based coverage, and flexible payment models tailored to the financial realities of informal workers, gig economy participants, and low-income groups. These innovations have helped generate moderate growth in the insureds category, as more individuals gain access to coverage for health, travel, life, property, and even crop or weather-related risks. However, while the potential is high, the pace of adoption remains moderate due to persistent structural challenges.

A significant portion of South America's population still lacks formal financial inclusion, and many remain skeptical of insurance providers due to a historical lack of transparency, poor claim settlement experiences, or limited awareness of the value proposition. Moreover, economic volatility, inflation, and income instability in several countries restrict consumers’ ability to prioritize or maintain insurance coverage over more immediate financial needs.

Brazil is leading the South American insurtech industry due to its large underserved population, rapidly expanding fintech ecosystem, and supportive regulatory environment fostering digital insurance innovation.

Brazil has positioned itself as the frontrunner in the South American insurtech industry, largely owing to the combination of a vast population with low insurance penetration and a booming digital economy. With over 200 million people many of whom remain uninsured or underinsured - Brazil presents immense untapped potential for insurance providers looking to expand coverage using cost-effective, digital-first models. This demand is being met by an active and growing community of insurtech startups, which are leveraging Brazil's thriving fintech landscape to integrate insurance into mobile banking apps, digital wallets, and e-commerce platforms.

The rise of embedded insurance, microinsurance, and pay-as-you-go models is helping reach previously inaccessible rural and low-income populations. These innovations are tailored to local needs, offering flexible premiums and simplified policy structures that resonate with a digital-savvy yet cost-conscious user base. The Brazilian government and regulatory bodies, especially the Superintendence of Private Insurance (SUSEP), have been instrumental in accelerating this growth. SUSEP has introduced initiatives like the Open Insurance framework, which mirrors the successful Open Banking model, allowing greater data sharing and interoperability among insurers and third-party providers.

This not only enhances transparency and competition but also enables insurtech companies to deliver more personalized, data-driven offerings. Regulatory sandboxes launched in recent years have further encouraged innovation by allowing startups to test products and services in a controlled environment, reducing time to market while ensuring consumer protection. These measures have significantly lowered entry barriers and fostered a culture of experimentation and technological advancement.

Considered in this report

• Historic Year: 2019
• Base year: 2024
• Estimated year: 2025
• Forecast year: 2030

Aspects covered in this report

• Insurtech Market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Type

• Auto
• Business
• Health
• Home
• Specialty
• Travel
• Others

By Service

• Consulting
• Support & Maintenance
• Managed Services

By End-User

• Insurance Companies
• Brokers and Agents
• Third-Party Administrators
• Insureds

The approach of the report:

This report consists of a combined approach of primary as well as secondary research. Initially, secondary research was used to get an understanding of the market and listing out the companies that are present in the market. The secondary research consists of third-party sources such as press releases, annual report of companies, analyzing the government generated reports and databases.

After gathering the data from secondary sources primary research was conducted by making telephonic interviews with the leading players about how the market is functioning and then conducted trade calls with dealers and distributors of the market. Post this we have started doing primary calls to consumers by equally segmenting consumers in regional aspects, tier aspects, age group, and gender. Once we have primary data with us we have started verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations & organizations related to this industry, government bodies and other stakeholders to align their market-centric strategies. In addition to marketing & presentations, it will also increase competitive knowledge about the industry.