Published on and written by Cyril Jarnias
As global reinsurance enters a phase of capital replenishment and regulatory tightening, one player continues to dominate the landscape: Bermuda exempt company 2026: leading reinsurance. Behind this formula lies an entire financial hub model, built on exempted companies, an extremely sophisticated supervisory regime, and a deliberate specialization in heavy risks – from natural catastrophes to pension liabilities.
Percentage of global reinsurance capacity concentrated in Bermuda.
A Reinsurance Hub Turned Global Center of Gravity
The rise of Bermuda exempt company 2026: leading reinsurance is part of a long-term trend. In twenty years, the archipelago has gone from a niche market to a veritable global center of gravity for reinsurance, on par with London or New York in certain segments.
More than 1,100 insurance and reinsurance companies are established in Bermuda, with assets under management exceeding $1.6 trillion.
The weight of Bermuda exempt company 2026: leading reinsurance is also evident in financial flows: members of the Association of Bermuda Insurers and Reinsurers (ABIR) recorded over $171 billion in gross premiums in 2023, up 18% year-over-year. Major players based in Hamilton – Everest, RenaissanceRe, Arch, PartnerRe, Axis, Convex, Aspen, and Hamilton Insurance Group – feature heavily in the global Top 50 reinsurers, with four of them ranking in the Top 10.
A Systemic Role in Major Loss Events
The power of Bermuda exempt company 2026: leading reinsurance is measured not only by balance sheets but especially by the checks it writes after catastrophes. Between 2016 and 2023, the Bermuda market settled nearly $1,000 billion in claims, including around $500 billion for the United States alone in the property and catastrophe segments.
Overview of estimated financial contributions from Bermuda-based reinsurers following selected major catastrophes.
Estimated contribution of approximately $5 billion USD, a foundational event for the market.
Estimated contribution between $10 and $15 billion USD, major impact on terrorism coverage.
Estimated contribution over $15 billion USD, one of the largest losses.
Estimated contribution of approximately $6 billion USD, combining seismic and flood risk.
Estimated contribution of nearly $8 billion USD, significant flood-related losses.
Estimated contribution of approximately $5 billion USD, affecting the Caribbean and Florida.
| Event / Period | Estimated Contribution of Bermuda (Re)insurers |
|---|---|
| World Trade Center Attacks (2001) | $2.5 Bn (10% of claims) |
| 7 Gulf & Florida Hurricanes (2004‑2005, incl. Katrina) | $22 Bn (nearly 30% of insured losses) |
| US Catastrophes 2001‑2017 (major cats) | +$65 Bn |
| CA Hurricanes 2017‑2019 (California wildfires) | $9.2 to $9.6 Bn |
| Hurricane Ian (2022) | +$13 Bn expected (up to 25% of US market) |
| Japan Typhoons 2017‑2018 | $9.6 Bn |
This ability to absorb massive shocks is at the heart of the value proposition of Bermuda exempt company 2026: leading reinsurance: taking on extreme risks that many domestic markets no longer want – or can – carry on their balance sheets.
The Mechanics of Exempted Companies: Central Lever of the Model
At the heart of this system lies the legal structure of the “exempted company”. These are companies incorporated by non-Bermudians to conduct business internationally, being expressly exempted from the classic requirement of 60% Bermudian ownership.
This structure allows an international group to establish a reinsurance company in Bermuda with 100% foreign capital. It generally cannot operate locally without a license, except to reinsure the risks of other Bermuda insurers. However, it is free to conduct its business abroad.
A Status Designed for International Business
From a financial and operational standpoint, exempted companies have several defining characteristics:
| Characteristic | Effect for a Bermuda-based Reinsurer |
|---|---|
| Exemption from 60% Bermudian capital | Allows for full ownership by an international group |
| Non-resident status (exchange) | Great freedom for dividends, investments, offshore bank accounts |
| Specific license for local activity | Clear separation between offshore and onshore business |
| Tax Assurance Certificate possible | Guarantee against certain new taxes until 2035 |
| Obligation to pay an annual fee | Predictable fixed cost of legal presence |
This framework explains why major groups have overwhelmingly chosen this vehicle to structure their reinsurance platforms in Bermuda, whether for property & casualty reinsurance or life and long-term annuity reinsurance.
An Increasingly Sophisticated Regulatory Framework
While Bermuda exempt company 2026: leading reinsurance is sometimes still perceived as a “light” jurisdiction, the regulatory reality in 2026 is the complete opposite. The Bermuda Monetary Authority (BMA) supervises the sector with an arsenal that, for commercial reinsurers, is recognized as equivalent to Solvency II in Europe. The archipelago also benefits from “reciprocal jurisdiction” status with the US NAIC, allowing many Bermuda reinsurers to write US business without full collateral.
Prudential Architecture: BSCR, ECR and TCL
The pillar of the solvency system is the standardized internal model BSCR (Bermuda Solvency Capital Requirement), calibrated at a high-risk level (99% Tail Value-at-Risk at one year). For each insurer or reinsurer, the BMA calculates:
The regulatory framework for insurers defines three key capital levels: the Minimum Margin of Solvency (MMS), which is a regulatory floor; the Enhanced Capital Requirement (ECR), which is the higher of the MMS and the capital need calculated via the BSCR or an internal model; and the Target Capital Level (TCL), set by default at 120% of the ECR but often higher in practice.
In practice, for new entrants, the Authority does not hesitate to require target levels of 150%, or even 185% of the ECR depending on the risk profile. The capital structure is also strictly tiered into three “tiers” based on their loss-absorbing capacity, with minimum quotas for Tier 1 (the strongest) and caps for Tiers 2 and 3.
Schematic example of capital quality requirements for a major reinsurer (general business, type Class 4):
| Element | Typical BMA Requirement |
|---|---|
| Minimum statutory capital | $100 M for a Class 4 |
| ECR portion to be covered by Tier 1 | ≥ 60 % |
| Tier 2 cap | 66.67 % of Tier 1 |
| Tier 3 cap | 17.65 % of total Tier 1 + Tier 2 |
| “Reference” TCL | 120 % of ECR (often higher in practice) |
This capital rigor explains the observed solvency levels: at the end of 2024, the median solvency ratio for the long-term sector reached 286% and that for “asset-intensive” (AIR) reinsurance 259%, well above regulatory minima. A safety margin that reassures ratings agencies and cedants, while reinforcing the image of a well-capitalized market.
2026: The Year of Embraced “Over-Supervision”
The latest reforms are completing the tightening of Bermuda exempt company 2026: leading reinsurance within a logic of enhanced transparency, particularly for long-term life reinsurers, at the heart of pension and annuity liability transfers.
Effective January 1, 2026, insurers of classes C, D, and E (excluding domestic business) must include a detailed assets-liabilities statement in their closing reports. This obligation stems from the Insurance Amendment (No. 2) Act 2025, which entered into force on January 7, 2026, and also strengthens the powers of the BMA (Bermuda Monetary Authority).
– Extending group supervision to entities controlled by a “specified” insurer (Classes 3A, 3B, 4, C, D, E) or a Bermuda-based parent;
– Designating a non-insurer holding company at the top of an insurance group as a regulated entity;
– Requiring 30-day prior notification for any merger, acquisition, or regrouping within a Bermuda group.
Dedicated rules for recovery planning (Recovery Plan Rules 2024) are activatable for systemically important insurers, for example those with a three-year average of assets exceeding $10 billion or gross premiums above $5 billion. An approach inspired by international IAIS standards, confirming the BMA’s positioning as a systemic hub regulator.
Life and Annuity Reinsurance: The Silent Engine
While Bermuda exempt company 2026: leading reinsurance is often associated with natural catastrophes, the real revolution of the past fifteen years has occurred on another front: “asset-intensive” (AIR) reinsurance, focused on annuities and retirement risk transfers.
Bermuda controls over 80% of US life and annuity liabilities ceded offshore, representing more than $900 billion in US liabilities as of end-2024.
Recent evolution of life/annuity reserves ceded offshore (US insurers):
| Indicator | 2020 | 2023 | 2024 |
|---|---|---|---|
| Offshore share of ceded reserves (%) | 26 % | ~40 % | ~40 % |
| Bermuda’s share of US offshore (%) | – | > 1/3 in stock | 84 % of total |
| Total offshore amount (reserves, in $) | – | $0.8 T (approx.) | > $1.1 T |
| Bermuda’s share of new business 2023‑24 | – | 60 %+ | > 60 % |
This specialization responds to three major trends: rising interest rates making annuities more attractive, an explosion in annuity sales in the United States, and a widening protection gap linked to aging populations. Bermuda reinsurers offer a rare combination: a robust yet flexible prudential framework, an economic reserve approach more “refined” than US statutory accounting, and sophisticated investment expertise.
Property & Catastrophe: An Undiminished Appetite
In the property & catastrophe line, Bermuda exempt company 2026: leading reinsurance remains the primary coverage provider for many markets. The archipelago is the leading catastrophe reinsurance provider for US insurers, with impressive market shares in certain segments:
| Segment / Region | Estimated Share of Bermuda Reinsurers |
|---|---|
| Florida & Texas hurricane reinsurance | ~60 % |
| Texas Windstorm Pool (2019) | ~25 % |
| US medical malpractice reinsurance | ~25 % |
| US crop reinsurance in some states | ~7 % |
| Property cat broker-placed in Europe | ~20 % |
| Property cat broker-placed in the United Kingdom | ~40 % |
| Capacity for Lloyd’s syndicates (ABIR, 2020) | 42 % (£14.4 Bn) |
In 2024, the Bermuda international P&C sector recorded a 22.5% jump in its net income to $30.9 billion, with a combined ratio of 79.6%, a very comfortable level for an industry often shaken by catastrophes. Net premiums written grew by 5.4% to $72.6 billion, while total losses climbed 10.8% to $39.4 billion – a sign that rates and protection structures have been adjusted profitably.
Total exposure to major climate risks (hurricanes, earthquakes) reaches nearly $220 billion in 2024.
ILS and Capital Markets: The Pivotal Role of the BSX
Another pillar of the status of Bermuda exempt company 2026: leading reinsurance: its ability to channel capital market appetite for insurance risk via Insurance-Linked Securities (ILS). The Bermuda Stock Exchange (BSX) has established itself as the dominant platform for catastrophe bonds and other ILS.
At the end of 2025, the BSX reported:
The total value of listed ILS securities is $65.2 billion, up 16.4% year-over-year.
In 2025, 209 new cat bond and ILS issuances were admitted, +34% compared to 2024. The creation of a specific regulatory category – Collateralised Insurer – and the introduction of the “unrestricted” Special Purpose Insurer model have provided a legal framework perfectly suited to capital market-backed structures.
This firepower in ILS reinforces the ability of Bermuda exempt company 2026: leading reinsurance to offer hybrid solutions to cedants: traditional reinsurance, sidecar vehicles, SPIs, or bespoke combinations.
A Strategic Tax Shift: 15% CIT and Tax Credits
For a long time, Bermuda was synonymous with a total absence of tax on profits or capital gains. The landscape is changing radically with the adoption, in late 2023, of a 15% corporate tax for multinational groups exceeding €750 million in revenue, under the OECD’s Pillar 2.
The Corporate Income Tax (CIT), applicable starting from the 2025 fiscal year, could have weakened the attractiveness of the model. But the authorities have simultaneously deployed an arsenal of tax credits, via the Tax Credits Act of December 11, 2025, managed by the new Corporate Income Tax Agency.
Massive Tax Credits, Oriented Towards Substance
The system is clearly oriented towards local “economic substance”: credits are correlated to payroll on the island, local expenses (offices, equipment, utilities, professional services, training), and community contributions. For groups where over 50% of income comes from insurance/reinsurance activities regulated by the BMA, the effective tax reduction can be significant.
Estimated effective tax rate for some insurers after full deployment of credits over three years, according to Jefferies analysts.
Several companies – White Mountains, Hamilton – anticipate meeting criteria allowing them to defer the effective payment of tax for up to five years, subject to limited geographic distribution and a low base of tangible assets outside the main country.
For large reinsurance platforms, the new tax system is overall neutral, even slightly positive after factoring in tax credits, as they already bore part of the tax. The choice to establish in Bermuda is primarily motivated by the quality of the prudential and market framework, not tax optimization.
Real Economy: Substance, Jobs, and Training Under Pressure
Beyond ratios and taxation, Bermuda exempt company 2026: leading reinsurance faces a much more prosaic constraint: human resources. The market suffers from an acute talent shortage, in direct competition with London, Zurich, Singapore, or New York to recruit actuaries, risk managers, compliance specialists, and sophisticated finance professionals.
The main challenge for Bermuda-based companies is the very high cost of living, coupled with a housing crisis and limited school capacity for expatriate families. A “generational gap” also threatens leadership succession. In response, the BMA is investing in training the local workforce and the government is extending payroll tax relief for qualified new hires until March 31, 2026.
This issue of substance is also at the heart of regulatory requirements: for both captives and commercial reinsurers, the Economic Substance Act requires that effective management, income-generating functions (underwriting, risk management, reporting, client service), and an adequate number of staff be located on the island. Exempted companies must therefore balance strategic centralization and local reinforcement, under penalty of sanctions from the Registrar of Companies.
Global Competition: Singapore, Cayman, London… but Bermuda Holds the Lead
Facing Bermuda exempt company 2026: leading reinsurance, several jurisdictions are sharpening their tools.
In Asia, Singapore and Hong Kong are positioning themselves as alternative hubs, with clear regimes, tax incentives, and unmatched regional connectivity. The Singapore MAS cultivates a “business-friendly but robust” positioning, while some Asian reinsurers – such as Peak Re – are actually opening subsidiaries in Bermuda to attack the US market from the hub.
In the Caribbean, the Cayman Islands capture about 10% of US life and annuity liabilities reinsured offshore. This financial center is seeing a rise in licenses and structured deals. Meanwhile, in Europe, the UK regulator (PRA) announced in 2025 its intention to toughen its stance on annuity transfers to offshore, planning to “disallow” funded reinsurance arrangements in capital requirement calculations.
Nonetheless, recent data shows that Bermuda maintains a clear lead. In 2023‑2024 life/annuity transactions, the archipelago concentrates over 60% of ceded reserves, and 84% of US liabilities sent out of the country. In the catastrophe and ILS segments, dominance remains overwhelming. Major deals illustrate this: creation of Sconset Re by Allianz ($4 Bn annuities ceded), launch of Chariot Re by MetLife with General Atlantic ($1 Bn capital), purchase of Resolution Life ($85 Bn assets) by Nippon Life, aggressive development of Athora, notably via the acquisition of Pension Insurance Corporation in the UK.
An Industry in Constant Motion: Mergers, IPOs, Leadership Changes
The Bermuda exempt company 2026: leading reinsurance ecosystem is in perpetual flux. The 2025‑2026 period has been marked by a cascade of CEO appointments and senior-level executives: Jennifer Wilson at Lancashire, Adrian Daws at Hamilton Re, Neil Eckert at Conduit Re, Jim Williamson succeeding Juan Andrade at Everest, Nicolas Papadopoulo replacing Marc Grandisson at Arch Capital, as well as chain movements at Argo, Aon, AXA XL Bermuda, Acrisure, Ascot, etc.
Amount, in billions of dollars, of the takeover of Aspen by Sompo, illustrating the intensity of capital operations in the sector.
At the same time, the BMA continues to issue new licenses: 10 Class E insurers (long-term, assets ≥ $500 M) authorized in 2024, three more already in 2025, plus around forty new reinsurance/ILS vehicles registered in the first nine months of 2025. The creation of new pure players, however, remains more measured than during the post-Katrina or post-Irma waves, as capital and expertise barriers have risen significantly.
Why Cedants Continue to Choose Bermuda
When asked about their reasons for massive recourse to offshore, 90% of insurance executives cite “capital efficiency” as the main driver. Behind this term are several realities that characterize Bermuda exempt company 2026: leading reinsurance:
The island’s regime offers several key advantages: an economic reserve approach (Economic Balance Sheet) allowing better recognition of diversification effects and fewer regulatory floor constraints; capital charges calibrated by the BSCR, strict but reflecting risk profiles more finely than some domestic regimes; great investment flexibility under the “prudent person” principle, without asset class limits; and a complete ecosystem of specialized services (lawyers, captive managers, actuaries, asset managers) making the island a “one-stop shop” for risk engineering.
Added to this is a proven capacity to innovate: creation of dedicated classes for collateralized insurers, early adoption of regulatory sandboxes for insurtech, rapid adjustment of long-term solvency rules (scenario-based approach, 2025‑2026 amendments on classes C, D, E). This plasticity explains why, despite the rise of Singapore or the Caymans, flows remain predominantly channeled via Bermuda.
2026: A More Regulated, Yet More Indispensable Hub Than Ever
Looking ahead to 2026, Bermuda exempt company 2026: leading reinsurance resembles less a “paradise” and more a first-class financial center, endowed with:
– A prudential regime equivalent to Solvency II for major companies;
– A NAIC reciprocal status enabling smooth relations with US cedants;
– Corporate taxation aligned with the OECD standard, but mitigated by pro-substance tax credits;
– A dominant ILS market, backed by a specialized exchange;
– And a critical mass of global players across all reinsurance segments.
The challenge will now be to preserve this advantage in an increasingly contested environment, where London wants to retain more capital, where Washington monitors affiliated reinsurance via BEAT and possible reforms, and where Asia capitalizes on its domestic growth.
For groups considering the creation or strengthening of a Bermuda exempt company 2026: leading reinsurance, the message is twofold. On one hand, the opportunity remains unique: few jurisdictions can combine capital depth, technical sophistication, and international regulatory recognition to this extent. On the other hand, the requirements for substance, transparency, and governance have never been higher. The era of hollow shells is over; that of integrated Bermuda platforms, overcapitalized, hyper-supervised, is just beginning.
In this new configuration, Bermuda’s place is no longer content to be the “world capital of risk”; it is becoming, very concretely, its central workshop, where the responses to the great insurance challenges of the 21st century are forged: climate, longevity, cybersecurity, geopolitical instability.
Bermuda exempt company 2026
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
