IaaS and the Future of Inclusive Insurance in Latin America

Fremont, CA: The Insurance-as-a-Service (IaaS) model is a new approach to insurance distribution and scalability that is gaining traction in Latin America. It enables businesses, including non-traditional companies such as retailers and fintechs, to offer insurance products without having to build the entire infrastructure from scratch. By leveraging modular, API-first platforms, IaaS providers enable their partners to quickly and easily integrate insurance into their own digital ecosystems. This model is well-suited to address the unique opportunities and challenges of the Latin American market, which is experiencing rapid digitalization but still has a significant "insurance gap."

Key Drivers for IaaS Adoption in Latin America

Despite being one of the world’s fastest-growing insurance markets, the region faces a substantial “insurance gap,” with many individuals—particularly within the rising middle class—remaining uninsured or underinsured. IaaS offers an effective means to reach these underserved populations through both new and established digital channels. The region’s rapid digital transformation, marked by increasing internet and smartphone penetration, has cultivated consumer expectations for seamless, tech-enabled experiences similar to those in banking and e-commerce. The scalability of IaaS platforms also addresses the limitations of traditional agent- and broker-led distribution models, enabling insurers to quickly launch products and expand their reach without significant upfront costs. Likewise, rising consumer demand for simple, transparent, and personalized insurance solutions—primarily through embedded insurance—positions IaaS as an ideal model to streamline the process of purchasing and managing insurance.

How IaaS Enhances Distribution and Scalability

The IaaS model revolutionizes insurance distribution by moving beyond traditional channels. It enables insurers to form strategic alliances with a wide range of non-insurance partners, such as banks, fintechs, retailers, and even mobility apps. These partners can then leverage the insurer's IaaS platform to offer tailored insurance products directly to their customers, creating a new, more efficient distribution network.

This approach offers significant scalability. An insurer can launch a new product in a matter of weeks by integrating with a partner's platform, a process that would have taken months or even years with traditional methods. This speed to market allows for experimentation with new products, such as microinsurance or usage-based policies, which are particularly well-suited for the region's diverse customer base.

The growing number of insurtechs and the increasing collaboration between startups and traditional insurers are expected to drive further innovation. As the market matures and regulations evolve, IaaS is likely to become a key driver in closing the region's insurance gap and making financial protection more accessible to everyone.