Bermuda's long-term insurance market is carrying sizable liquidity buffers, supported by conservative asset allocation and strengthening risk management practices, the Bermuda Monetary Authority (BMA) said in its April 2026 assessment based on year-end 2024 data.
The reinsurance regulator has also flagged liquidity risk management as a 2026 supervisory priority.
Under the BMA's 1-in-200 stress scenario, the median Liquidity Coverage Ratio (LCR) climbed to 471% in 2024 from 418% in 2023, well above the 105% regulatory minimum. The weighted average LCR moved to 762% from 527%.
Applying the International Association of Insurance Supervisors haircut methodology, the median LCR slipped to 350% from 360%, while the weighted average rose to 582% from 526%.
The findings sit within the BMA's broader 2024 stress-testing program covering solvency and climate scenarios, with commercial re/insurers reported as resilient across general business and long-term lines.
Bermuda's life and annuity sector is no fringe market. The Bermuda Business Development Agency says the segment manages over $1 trillion in assets, with the BMA itself reporting roughly $1.52 trillion in assets under management as of September 2025.
Oliver Wyman analysis indicates Bermuda reinsurers support more than $1 trillion in life insurance reserves globally.
The Financial Stability Oversight Council reported that US life insurers ceded $2.4 trillion of reserves in 2024, up from $1.4 billion in 2019, with offshore cessions, mostly to Bermuda, more than doubling to over $1.1 trillion.
About 57% of long-term insurer investments sat in cash, sovereign bonds and corporate bonds. Corporate bonds fell to 48% of portfolios from 56% in 2023, with CMBS/ABS at 17%, mortgage loans at 11%, equities at 8%, sovereigns at 5%, RMBS at 3%, cash at 4% and equity-type investments at 4%.
Investment-grade corporate bonds rated BBB- to AA- remained the main liquidity reservoir at 61.5%.
Best Estimate Liabilities exposed to lapse fell to 72.2% in 2024 from 77.5%. Products carrying medium economic penalties for early surrender rose to 65% of surrender values from 52%.
The findings come as global regulators sharpen their focus on Bermuda's private-equity-backed life reinsurance market. Apollo, KKR, Ares, Brookfield and Carlyle are all active through ownership of life insurers, drawing scrutiny over allocations to private credit and structured assets.
The Bank of England has warned that PE-backed insurers tend to hold more illiquid, higher-risk assets. The IMF has flagged contagion risks from asset-intensive reinsurance, and Japan's FSA in late April proposed amending its Comprehensive Supervisory Guidelines, with public comment closing May 11.
The BMA has responded with a prudent person principle and expanded disclosure requirements effective January 2026. S&P Global Market Intelligence said Bermuda saw a decline in new life and annuity reinsurance entrants during 2025 amid the tougher rules.
The BMA reviewed 76 Commercial Insurer's Solvency Self-Assessment filings. Adoption was strong for board reporting (91%) and quantitative liquidity risk appetite statements (89%), but only 57% of insurers had tiered Green/Amber/Red warning thresholds and 62% included board review of stress results.
