Bermuda's share of ceded US life liabilities climbs to 40.7%

Alirt Insurance Research counts $2.7 trillion in life and annuity liabilities that US insurers have ceded to reinsurers. Bermuda holds 40.7 percent of that. The share works out to roughly $1.1 trillion in reserves parked with carriers on the island. If you look only at reserves sent outside the United States, Bermuda's share rises to 85 percent.

The island's share was 30.9 percent in 2021. By 2025 it had reached 40.7 percent. Reserves ceded to Bermuda more than doubled in that period, Alirt says. The expansion is concentrated in a short window: about 92 percent of the Bermuda-ceded reserves on the books at the end of 2025 came from transactions initiated between 2017 and 2025.

The structures behind the reserves have grown with them. Bermudian reinsurers and sidecar structures formed since 2017 have accumulated nearly $355 billion in assumed reserves. US life insurers completed more than $73 billion in new Bermuda transactions in 2025 alone. The ten largest deals came to about $60 billion and included a mix of affiliated transactions, third-party arrangements, and sidecar structures backed by outside investors.

Alirt traces the flow to four factors: capital management flexibility, support for new business, management of legacy blocks, and access to third-party capital. That last item links this market to insurance-linked securities. Property-catastrophe sidecars have long channeled institutional money into reinsurance risk. Alirt's numbers suggest those same structures now carry a sizable share of annuity, pension risk transfer, and legacy liabilities.

The mix of business matters as much as the total. Alirt lists annuities, life insurance, pension risk transfer, structured settlements, and legacy blocks as the lines flowing into Bermuda. These are long-duration liabilities, with yields tied to life and annuity outcomes, so they can diversify a book built on storm risk. They also bring complexity. The structures holding third-party money are the ones regulators are scrutinizing, and the underlying blocks need actuarial discipline, not just a catastrophe model.

Alirt points to ongoing regulatory attention on reserve adequacy, investment portfolio composition, counterparty risk, and affiliated transactions. The initiatives include enhanced liquidity testing, expanded reporting, reserve adequacy reviews, and closer scrutiny of sidecar structures and affiliated deals. Bermuda and US regulators have both moved in that direction, and Alirt says the new rules will shape the market's next phase.

Cayman is the emerging alternative. Alirt notes growing interest in the Cayman Islands as a jurisdiction for life and annuity reinsurance; several new reinsurers and strategic partnerships have appeared there in recent years. Bermuda still leads, and Cayman's new vehicles remain a small fraction of the market. That interest may be a response to regulation: sponsors are lining up options if Bermuda acts on the scrutiny.

Outside-investor sidecars were among the largest deals Alirt identified in 2025. Newer Bermudian entities have accumulated $355 billion in assumed reserves. That total has built up since 2017. Third-party capital is moving into life and annuity risk at scale. If regulators tighten the rules on those structures, the market will find out how patient that money really is.