370% funding growth in LatAm while the rest of the world hits seven-year lows… what’s going on here?

The Latin America InsurTech Boom: What Can Established Markets Actually Learn?

370% funding growth in LatAm while the rest of the world hits seven-year lows… what’s going on here?

I’ll be honest — this one has me fascinated.

Global InsurTech funding is scraping the floor… and yet Latin America just clocked a 370% year-on-year surge in the first half of 2025. £121 million raised in six months — already beating last year’s total.

Not only that, the startup failure rate is surprisingly low at 9.4%. For a sector where failure is often baked in, that’s impressive.

So I started wondering: is this just an “emerging market thing”… or are there lessons here that InsurTechs in more established markets could actually borrow?

Why the Boom Happened

On paper, the LatAm surge looks like a perfect storm of factors that are tough to copy:

• A huge protection gap: less than 5% of GDP insured, with billions lost every year uninsured.

• Mobile leapfrog: straight to mobile-first financial services, skipping the traditional bank/insurance branch stage.

• Financial inclusion wave: bank accounts jumping from 55% to 80%+ in a few years, digital wallets now in the majority of pockets.

That’s rocket fuel for new entrants. And no, Europe or North America can’t exactly manufacture a protection gap out of thin air.

But here’s the bit that really made me stop and think.

The Established Players Weren’t Failing… They Were Comfortable

The traditional insurance industry in Latin America has actually been doing well — posting a 16.6% return on equity in 2022 (nearly double the global average).

To me, that says this boom isn’t about rescuing a failing industry. It’s about tapping the opportunities the big players were too comfortable to chase.

And to me, that seems like a very transferable insight.

What Might Actually Translate

Here are a few things I think established markets could learn:

1. Distribution costs In many mature markets, 20–30% of premiums vanish into broker commissions and middlemen. LatAm InsurTechs are showing that direct mobile distribution can actually work at scale, with far lower costs. 👉 It makes me wonder: how much of our distribution cost is real value… and how much is “because that’s how we’ve always done it”?

2. Mobile-only design In developed markets, “mobile-first” often means “we squeezed our desktop journey onto your phone.” LatAm players built mobile-only because that’s where their customers actually are. 👉 I think there might be untapped segments in established markets who’d also prefer a proper mobile-only experience… if it was built right from scratch.

3. Solving access, not polishing journeys Most established InsurTechs obsess over incremental improvements: slightly faster claims, omnichannel, AI tweaks. LatAm players are focused on access: reaching people who weren’t customers at all. 👉 To me, that’s a big nudge. Even in mature markets, plenty of groups are still underinsured or excluded altogether.

A Couple More Nuggets

Two more things I think are worth noting:

• Going multi-market: In LatAm, InsurTechs operating across borders are 3x more likely to survive. That’s not just about chasing growth, it’s about spreading risk.

• The B2B pivot: The most successful ones aren’t just selling direct. They’re becoming enablers — building the plumbing (pricing models, fraud detection, digital claims) that everyone else uses.

Both of those feel relevant anywhere.

The Questions This Raises

So here’s where my head’s at:

• Are we in mature markets focusing too much on optimising processes instead of solving access problems?

• Are we really serving all the customers we could… or just the ones we’ve always served?

• Could direct digital distribution work better than we think if it wasn’t chained to legacy channels?

My Takeaway

Yes, some of the Latin American boom is pure “emerging market magic” — massive protection gaps, mobile leapfrogging, financial inclusion waves. You can’t replicate that in London or New York.

But dismissing it all as “just emerging market stuff” feels like missing the point.

The transferable bit isn’t the growth rate. It’s the mindset: 👉 Questioning entrenched distribution costs 👉 Building mobile-only, not mobile-adapted 👉 Solving for excluded populations instead of polishing existing ones

Sometimes when you’re forced to build from scratch, you end up with better solutions than when you’re optimising legacy systems.

That, I think, is the real lesson worth stealing.