ALIRT Research Reports Continued Expansion of U.S. Life Insurers' Reinsurance Activity in Bermuda

Bermuda reinsurers continue to expand their share of assumed U.S. life insurance premiums per ALIRT Insurance Research's updated study of foreign reinsurance utilization by the U.S. life insurance industry.

HARTFORD, Conn., Aug. 6, 2026 /PRNewswire/ -- According to ALIRT Research's new report which examines the growing role of foreign reinsurance in the U.S. life insurance industry, Bermuda-based reinsurers continue to capture a significant and expanding share of life and annuity reserves ceded by U.S. insurers.

The report shows that U.S. life insurers had approximately $2.7 trillion in ceded life and annuity liabilities as of year-end 2025. Of that total, approximately $1.1 trillion was ceded to Bermuda-based reinsurers, representing 40.7% of all ceded liabilities and 85% of liabilities ceded to non-U.S. jurisdictions.

Bermuda reinsurance activity has expanded rapidly in recent years. Between 2021 and 2025, reserves ceded to Bermuda more than doubled, while Bermuda's share of total ceded U.S. life and annuity reserves also grew from 30.9% in 2021 to 40.7% in 2025.

The report notes that much of the growth has occurred since 2017, with approximately 92% of outstanding Bermuda-ceded reserves at year-end 2025 stemming from transactions initiated between 2017 and 2025. Industry activity has been driven by both affiliated and third-party transactions covering annuities, life insurance, pension risk transfer business, structured settlements, and legacy insurance blocks.

The report also identifies substantial growth in newly established Bermuda reinsurers and sidecar structures. Since 2017, recently formed Bermuda reinsurance entities have accumulated nearly $355 billion of assumed reserves, representing a significant portion of the market's overall expansion.

During 2025 alone, U.S. life insurers completed more than $73 billion of new Bermuda reinsurance transactions. The ten largest transactions accounted for approximately $60 billion of that total and included a mix of affiliated transactions, third-party reinsurance arrangements, and sidecar structures supported by outside investors.

The analysis highlights several factors contributing to the continued use of Bermuda reinsurance, including capital management flexibility, support for new business growth, management of legacy blocks of business, and access to third-party capital. At the same time, the report notes ongoing industry and regulatory focus on reserve adequacy, investment portfolio composition, counterparty risk, and affiliated transactions.

Recent regulatory developments in both Bermuda and the United States are expected to influence the future direction of the market. Regulatory initiatives have included enhanced liquidity testing, expanded reporting requirements, reserve adequacy reviews, and increased scrutiny of sidecar structures and affiliated transactions.

In addition to Bermuda, the report notes growing interest in the Cayman Islands as an alternative jurisdiction for life and annuity reinsurance activity. Several new reinsurers and strategic partnerships have emerged in recent years, though Bermuda continues to maintain a leading position within the market.

The report concludes that reinsurance has become a core component of risk and capital management strategies for many U.S. life insurers. As the market continues to evolve, insurers, regulators, and other stakeholders are expected to remain focused on balancing capital efficiency, financial strength, and policyholder protection.

For more information or to request the full report, contact [email protected] or visit www.alirtresearch.com. 

About ALIRT Insurance Research

ALIRT Insurance Research is an independent financial analysis firm specializing in monitoring insurer solvency and performance trends for institutional clients. Based in Hartford, Connecticut, ALIRT provides analytical insights that assist organizations in managing insurance company exposure and maintaining fiduciary oversight.

SOURCE ALIRT Insurance Research