AM Best has revised its outlook to stable from negative for Brazil’s reinsurance market, citing its resilience to weather-related events and favorable bottom-line results in 2025, driven by renewed underwriting discipline.

In addition to new initiatives related to reinsurance and retrocession, AM Best’s outlook revision to stable also reflects the sustained recovery of Brazil’s reinsurance industry due to keen risk selection, coupled with beneficial bottom-line results, amid the new tax reforms taking place in the country, according to the Best’s Market Segment Report.

Recent tax changes applied to Brazilian insurers and reinsurers pressured profitability in 2025, but were also applied to foreign exchange transactions, with offshore reinsurers paying more than triple the taxes than in previous years. Another change occurred in April 2026, when Brazil’s value-added tax reform introduced the CBS (Contribuição sobre Bens e Serviços) and IBS (Imposto sobre Bens e Serviços) taxes, replacing federal, state, and municipal levies that used to complicate operational and pricing procedures. “The expectation of this reform is to reduce tax cascading for companies with long supply chains while enhancing the tax burden for service providers,” said Ricardo Rodriguez Perez, senior financial analyst, AM Best. “The pilot implementation will take place throughout 2026, which is expected to show operational gaps.”

Among the report’s other highlights:

• Reinsurance industry premium has slowed since 2022 despite positive bottom-line results in 2025. This deceleration shows the improvement in risk selection from local reinsurers but also reflects the increase of premium ceded by local insurers to reinsurers offshore.
• The industry generated favorable underwriting results at the end of 2025 for the first time since 2019. Amid its positive results, the double-digit interest rate environment (15% at YE 2025) fueled its profitability, representing the third consecutive year with supportive bottom-line results. The most significant lines of businesses contributing to annual growth in 2025 were health, property, auto, marine, and financial risk.
• Brazil is creating better conditions for its reinsurance and retrocession market by introducing insurance-linked securities (ILS)-like structures such as the “Letra de Risco de Seguro,” which cedes risks to a special purpose vehicle. It is designed to lower insurance costs for Brazilian consumers by providing more efficient reinsurance capital from institutional investors.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=368321.

This Best’s Market Segment Report is part of AM Best’s look at the global reinsurance industry around the Rendez-Vous de Septembre in Monte Carlo. Other reports, including AM Best’s ranking of top global reinsurance groups and in-depth looks at the insurance-linked securities, life/annuity and regional reinsurance markets, have been published. To view AM Best’s global reinsurance reports, as well as video coverage of Rendez-Vous de Septembre, please visit AM Best’s Reinsurance Information center.

Lastly, AM Best will host its annual reinsurance market briefing at Rendez-Vous de Septembre on Sept. 6, 2026, at 10:15 a.m. (CEST) in Monte Carlo. For more information, please visit the event website.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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