Bermuda’s reinsurance industry is undergoing a dramatic expansion, with more than US$50 billion in new capital flowing into its life insurance sector since 2016, according to industry leaders at the Bermuda Captive Conference on Wednesday.
The growth is being driven by a shift toward “asset-intensive reinsurance transactions,” a departure from more traditional reinsurance models, according to a report by The Royal Gazette. These transactions allow insurers to transfer both assets and liabilities to Bermuda-based reinsurers, effectively freeing up capital for new business ventures.
“What we've seen since 2016 has been quite a significant growth in what we call asset-intensive reinsurance transactions, where the ceding insurer based in jurisdictions like US, Europe and Asia are looking to reinsure and see both asset and liability ceded to Bermuda insurers," Neha Arora, chief executive of Athora Life Re, said during a panel discussion.
According to Arora, the model benefits ceding insurers by removing high-risk, long-duration liabilities from their balance sheets, providing greater financial flexibility.
The capital influx is largely coming from long-term institutional investors, including sovereign wealth funds and pension funds, which are well-suited to support the long-term commitments typical of life insurance products, The Royal Gazette reported.
Beyond life insurance, the broader reinsurance market in Bermuda is also maturing. During the same panel, Christian Dunleavy, president and CEO of Aspen Re, highlighted a recent milestone for his company.
“We're a just over $3 billion market cap insurer and reinsurer recently listed on the New York Stock Exchange about six weeks ago," Dunleavy said.
The Bermuda Captive Conference is being held this week at the Hamilton Princess Hotel & Beach Club.
