S&P Global Ratings has reaffirmed Bermuda’s long-term sovereign credit rating at ‘A+’ and its short-term rating at ‘A-1’, maintaining a stable outlook for the jurisdiction.
The decision reflects the agency’s view of Bermuda’s economic stability, the role of its international insurance and reinsurance sector, and the government's recent implementation of tax reforms.
In a report, S&P cited the steady performance of Bermuda’s insurance industry and the government’s rollout of a 15% corporate income tax on large multinational companies, introduced in January 2025.
The tax is part of Bermuda’s compliance with the global minimum tax framework established by the Organisation for Economic Co-operation and Development. The first installment of the tax is due in August.
S&P expects the new tax to create an additional revenue stream that will support fiscal consolidation, reduce interest payments, and contribute to debt repayment over the coming years.
According to the report, Bermuda’s insurance and reinsurance industry remains central to the island’s economy, contributing approximately US$2 billion annually, or around 29% of gross domestic product. However, S&P also noted that Bermuda’s dependence on this sector makes it vulnerable to changes in global insurance markets.
The world’s dependence on Bermuda’s reinsurance segment cannot be understated as well.
The island nation now reportedly represents 35% of the world’s reinsurance capacity, with the market paying out around US$500 billion in property and catastrophe casualty specialty losses in the US alone.
Despite those risks, the agency said Bermuda’s institutional strength and economic profile offer a degree of protection from external shocks. S&P said it believes that a combination of prudent institutions and a high-income economy would help mitigate the impact of global trade fluctuations and financial market volatility.
The agency also highlighted the island’s political stability and continuity in governance, following the Progressive Labour Party’s third consecutive election victory in February. S&P pointed to this consistency, along with strong external asset positions and a record of economic reform, as contributing factors to the stable rating outlook.
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