ALIRT Report On ‘Concern’ Over Reinsurers
ALIRT Research released a report saying there is “concern” regarding the “rapid increase of U.S. life insurance and annuity reserves ceded to reinsurers in non-U.S. jurisdictions, especially those domiciled in Bermuda.”
A statement from the company said, “There has been growing concern over the last several years regarding the rapid increase of U.S. life insurance and annuity reserves ceded to reinsurers in non-U.S. jurisdictions, especially those domiciled in Bermuda.
“As a leading source of market intelligence on the U.S. insurance industry, ALIRT Research has closely tracked this phenomenon which appears to mark a secular change in domestic life insurer strategies around capital management and product growth.
“In a recent client release, ALIRT provides an in-depth update on the use of foreign reinsurance by U.S. insurers as of the year-end 2024 regulatory financial statements. Some of the more interesting findings include:
- “As of year-end 2024, U.S. life insurance and annuity reserves ceded to Bermuda-based reinsurers equaled 38% of the total $2.4 trillion reserves ceded by U.S. based life insurers, up from 26% in 2020.
- “Bermuda based insurers accounted for 84% of U.S. life insurance and annuity reserves ceded to all non-U.S. countries as of year-end 2024.
- “As of year-end 2024, 90% of outstanding ceded U.S. life insurance and annuity reserves to Bermuda were from transactions effective 2017-2024.
“The remarkable growth in non-U.S. reinsurance is further analyzed in the balance of the study, including a discussion of:
- “The largest Bermuda reinsurer counterparties,
- “The largest Bermuda reinsurance transactions in 2024 and through July 2025,
- “Recent entrants to the Bermuda life reinsurance market, and
- “The top reinsurance exposures among U.S. life insurers.
“The study concludes with a discussion of both the benefits and risks of foreign reinsurance utilization for U.S. life and annuity insurers and what this on-going strategy may mean for individual insurers going forward, especially amid recent regulatory developments in the U.S. and Bermuda.”
