The Bermuda Monetary Authority’s (“BMA”) recent implementation of additional regulatory enhancements align with its ongoing mission to ensure its supervisory framework continues to address an ever-evolving (re)insurance industry. The enhancements, which aim to provide increased comfort to policyholders, cedants and other stakeholders have been met with a steady influx of new transactions and entrants to the market. The continued influx affirms Bermuda as the offshore domicile of choice for (re)insurers and capital providers in the (re)insurance space.
This market overview features certain key (re)insurance transactional and regulatory matters driving growth within the life and annuity, property and casualty (P&C) and insurance-linked securities (ILS) markets.
Life after CP2
In March 2024, amendments to the commercial (re)insurers and (re)insurance group prudential rules took effect, memorializing all of the enhancements to the commercial long-term regime that the BMA previewed throughout 2023 with local industry stakeholders via CP2. As existing Bermuda (re)insurers and (re)insurance groups spent most of 2024 moving towards the implementation of the new rules, Bermuda also saw the establishment of 13 additional commercial life and annuity (re)insurers and the completion of a number of new transactions. These developments contributed to the already significant volume of business being ceded to Bermuda from jurisdictions such as the US and Japan. Early 2025 has continued to show momentum, with several new reinsurers being licensed, existing life and annuity reinsurers looking to partner with private capital providers to further grow their business and the first wave of filings under the amended prudential rules (now complete), demonstrating robust industry adoption and compliance.
Property and Casualty: navigating climate change and innovation
In recent years, climate change and technology has played a significant role in the evolution of the P&C industry. These shifts have presented both challenges and opportunities. On one hand, climate change and technology have increased risk and exposure in the (re)insurance industry. On the other hand, climate change and technology have offered a unique opportunity to redefine how risk is assessed, protection gaps are determined, products are developed and claims are managed. Notably, the BMA’s strategic objectives for 2025 identified climate change and the use of AI within the (re)insurance sector as key focus areas. It follows that we can expect greater integration of these themes within the Bermuda regulatory and supervisory framework.
The changes within the P&C space have not dampened growth. In September 2024, member companies of the Association of Bermuda Insurers and Reinsurers (ABIR) reported record gross written premium of over US$171 billion in 2023, up from the US$145 billion figure that was reported in 2022. Above all, Bermuda (re)insurers continue to play a significant role in the global P&C industry. Putting this role into context, Bermuda-based (re)insurance companies are projected to settle gross claim losses of approximately US$10 billion stemming from the catastrophic wildfires which impacted Southern California in January 2025. Currently, industry-insured losses are projected to exceed US$30 billion. Assuming losses at this level, Bermuda’s (re)insurance market is expected to bear approximately 30% of the total insured losses stemming from the wildfires.
Insurance-Linked Securities: increased size and complexity
Over the course of the last year, there was a raft of significant cat bond transactions for existing ILS sponsors with a number of Issuers now providing over a billion dollars of coverage. The industry continues to explore a number of innovative new offerings and cyber risks in particular continue to be a main topic of conversation. At the start of 2025, the first ever Canadian cat bond was an exciting development and we look forward to further deals from the Great White North.
Of course, cat bonds haven’t been the only deals on the block over the last year. We were delighted to note the various Collateralised Insurer registrations over the past year. The Collateralised Insurer class was introduced by the BMA in 2019 in recognition of the increasing sophistication of the ILS market. The market has also been keen to take advantage of the flexibility offered by the unrestricted SPI model (also introduced in 2019). We are seeing these vehicles being used by sponsors looking to provide access to the market by new players, both investors and cedants.
