Lockton Re, the reinsurance arm of independent insurance broker Lockton, has announced the launch of a dedicated insurance-linked securities (ILS) platform for Brazil.
The reinsurance brokerage has fully deployed its advisory and structuring capabilities through a locally licensed special purpose securitization entity (SSPE) specifically targeting the Brazilian Letra de Risco de Seguro (LRS) market.
The platform is led by Rodrigo Botti, country director for Brazil. Since 2016, he has played a key role in the development of national ILS regulations up to the promulgation of Lei 14.430/2022 and Resolução CNSP 453/2022.
Botti joins Dario Luna of Lockton Re (LAC), a parametric insurance expert who developed the Mexican catastrophe bond program.
Lockton Re says it can bypass lengthy setup delays by working closely with independent SSPEs licensed in Brazil. This ready-to-deploy vehicle enables the company to offer rapid issuance, immediately opening the LRS market to institutional investors and Brazilian cedants.
The platform will support indemnity parameters and index-based triggers for a variety of risks, including agribusiness, infrastructure, climate catastrophe and regulatory capital relief.
“Brazil has established one of the most well-designed ILS regulatory frameworks in the world. The domestic LRS market builds on existing global structures, bringing global governance standards while creating innovations specific to Brazilian market realities,” said Botti.
Adding: “Colleagues at Lockton Re have been involved since at least 2023 and we are proud to now be able to offer a full range of services – from structural and regulatory advice to investors – to help this market realize its extraordinary potential.”
The global ILS market demonstrates the value of linking insurance risks to capital markets, with catastrophe bond issuance exceeding US$25.6 billion in 2025 and the total market exceeding US$61 billion.
Major institutional investors in Switzerland, the Netherlands and the United States increased allocations due to high returns, low volatility and minimal market correlation.
Brazil’s LRS market is facing similar expansion. With annual reinsurance premiums approaching R$30 billion and typical pricing at 3-10% of nominal prices, insurance could reach R$30 billion to R$100 billion per year, matching Brazil’s CRI and CRA capital market instruments.
Following Andrina SSPE’s first LRS issuance in May 2025, Lockton Re believes that Brazil is at a structural turning point in insurance risk financing and is committed to leading this transformation.
Luna commented: “Having spent many years building the Mexican catastrophe bond program and working in the parametric insurance space in Latin America, I can confidently say that Brazil’s LRS is the most robust ILS regulatory structure in Latin America. Our team is now ready to provide new cedants with a competitive ILS solution and support them as the market matures.”