Bermuda's life and annuity reinsurance sidecar market has quadrupled since 2021 and now holds an estimated $375 billion in assumed liabilities, according to a new Morningstar DBRS report.The growth signals a shift in how major US carriers are managing the liabilities behind the policies brokers place.
A reinsurance sidecar allows an insurer to share mortality or longevity risk with institutional investors. The insurer cedes a defined block of policies to the sidecar. Investors provide capital to back those risks and receive a share of profits in return.
The scale and composition of that investor base has changed significantly in recent years. Major carriers have established sidecars in Bermuda and the Cayman Islands with alternative asset managers such as KKR, Apollo, Blackstone, and PIMCO. MetLife, Global Atlantic, Prudential, Athene, and Allianz are among the insurers with active vehicles.
The market grew at roughly 32% per annum over the past four years, according to Morningstar DBRS data. New sidecars in 2025 included Chariot Re, a MetLife vehicle partnered with General Atlantic, and Sconset Re, an Allianz vehicle partnered with PIMCO. In 2026, Fortitude Re and Carlyle established FCA Re.
For sponsoring insurers, the appeal is twofold. Sidecars provide access to alternative asset classes such as private credit, infrastructure, and mortgage loans that can improve asset-liability matching. They also deliver capital relief, because Bermuda is an NAIC-qualified jurisdiction where ceding insurers can obtain statutory reserve credit with reduced collateral requirements.
The products most commonly ceded include fixed annuities, fixed indexed annuities, multiyear guarantee annuities, structured settlement annuities, and pension risk transfers. The model is expanding to whole life insurance as investor appetite for insurance risk broadens beyond the annuity market.
The section of the Morningstar DBRS report most relevant to brokers concerns investment disclosure. Most L&A sidecars do not publicly disclose their investment allocations. Portfolio composition is largely opaque to outside observers, including brokers whose clients hold the underlying policies.
Where disclosure does exist, the data shows wide variation in asset mix. Some sidecars hold heavy concentrations in corporate bonds while others show significant exposure to asset-backed securities, mortgage loans, and investment fund structures. Morningstar DBRS noted that private credit exposure is likely present across many vehicles, though actual amounts are not visible from public filings.
That opacity matters for broker due diligence. When a carrier cedes in-force policies to a Bermuda sidecar, the risk moves to a different balance sheet backed by assets the broker cannot independently examine. Policy terms held by clients remain unchanged, but the financial architecture behind the carrier's obligations has shifted.
Most sidecars still transact within their sponsor's corporate group, and third-party deals remain limited. After Metropolitan Tower Life ceded pension risk transfer business to MassMutual's Martello Re in 2023, Metropolitan Tower established its own vehicle. That sequence suggests carriers prefer to keep these structures in-house rather than rely on a competitor's vehicle, Morningstar DBRS noted.
The broader convergence of insurance and private markets gives context to that preference. Morningstar DBRS estimated that the seven largest publicly listed alternative asset managers held $1.4 trillion in insurance-related assets under management as of 2025. Pitchbook projects that figure will reach $2.2 trillion by 2030.
Regulators are taking note of that trajectory. The NAIC adopted Actuarial Guideline 55 in August 2025, requiring insurers to test the adequacy of reinsurance ceded offshore. The Bermuda Monetary Authority also introduced tighter disclosure and asset-modeling rules in 2026.
For brokers, those developments point to continued expansion of the sidecar structures sitting between private market investors and the policyholders they serve. The regulatory environment is still catching up to the pace of that growth.
