Fitch On Offshore Reinsurance Growth In Bermuda
Fitch Ratings “expects strong growth in offshore life reinsurance to continue, with Bermuda remaining the dominant primary jurisdiction.”
A statement from the organization said, “Offshore reserves ceded by U.S. life insurers have nearly doubled since 2020 to reach $1.3 trillion in 2025, with Bermuda accounting for 85% of the total, according to Fitch Ratings’ new report on North American life reinsurance. Fitch considers Bermuda’s regulatory regime to be increasingly robust and transparent, supported by Solvency II equivalence and NAIC reciprocal jurisdiction status.
“Offshore reinsurance growth reflects capital optimization, strategic partnerships with alternative investment managers, sidecar creation and record annuity sales. At YE 2025, 72% of offshore reinsurance was affiliated, indicating that capital management was the main driver. The share of reserves ceded to reinsurers affiliated with alternative investment managers rose to 44% in 2025, up from 30% in 2021.
“Bermuda’s regulatory framework was strengthened further in 2024 through CPII, which introduced higher capital and reserving standards, enhanced governance and more detailed disclosure requirements. In contrast, jurisdictions like the Cayman Islands and Barbados remain less robust, more flexible, and less transparent, which increases regulatory arbitrage risk.
“Fitch analyzes offshore reinsurance on a case-by-case basis, considering jurisdictional strength, capital standards and transaction structure. All metrics, including capitalization, are reviewed on a consolidated basis, including reserves ceded to offshore affiliates. Fitch expects offshore reinsurance volumes to remain elevated, supported by insurer-alternative investment manager partnerships, sidecars, and block reinsurance transactions. It will continue to monitor risks associated with rapid growth and regulatory arbitrage outside Bermuda.
“The full report titled, “North American Life Reinsurance: Growth Persists” analyzes ratings implications of reinsurance growth and its drivers. It is available at www.fitchratings.com.”
