Trillion-dollar tab for Bermuda insurance market
Bermuda’s commercial insurers and reinsurers incurred $1.1 trillion in gross claims costs to policyholders and cedants globally during the nine-year period from 2016 to 2024, according to Bermuda Monetary Authority data released on Friday.
These costs covered large catastrophes, property and casualty losses, as well as life insurance claims for policyholders’ dividends, surrenders, maturities, annuities — including payments for financial and biometric risks — accident and health benefits.
The information is based on data compiled by the BMA from claims surveys and annual statutory filings of commercial insurers.
The nine-year claims data highlight the significance of the Bermuda market in the global economy.
The data also reveal a consistent annual increase in claims incurred, rising from $46 billion in 2016 to $211 billion in 2024.
Notably, the total claims incurred in 2024 alone represents 20 per cent of the cumulative total for the entire nine-year period.
Craig Swan, the BMA chief executive, commented: “The Bermuda [insurance and] reinsurance market has a long history of demonstrating resilience through major stress events, including the 2007-08 global financial crisis, the Covid-19 pandemic, increased frequency and severity of natural catastrophe events, geopolitical turmoil, high inflation and interest rate volatility.
“The claims data indicate that despite these challenges, Bermuda’s [insurance and] reinsurance market and robust regulatory framework have enabled [insurers and] reinsurers to maintain adequate capitalisation and ample liquidity, ensuring the settlement of policyholder claims as they arise.”
Over the nine-year period from 2016 to 2024, Bermuda insurers and reinsurers incurred a total of $831 billion in gross claims costs to US, Europe and British policyholders and cedants, compared with $282 billion incurred during the 20-year period from 1997 to 2016.
Gerald Gakundi, deputy managing director, supervision (insurance), added: “Advanced technologies, including artificial intelligence, are poised to play a transformative role in the insurance sector, offering material benefits to [insurers and] reinsurers.
“Notwithstanding these advancements, significant loss events affecting life and property will inevitably persist, continuing to present substantial challenges.
“In such circumstances, policyholders rely on the established strength and reliability of Bermuda’s [insurers and] reinsurers.
“The BMA remains committed to the responsible implementation of its regulatory framework to reinforce the resilience of [insurers and] reinsurers, support the development of sustainable business models, and encourage responsible product innovation.”
The claims information relates to direct insurance and reinsurance business of 360 commercial insurance and reinsurance companies and does not include data from Bermuda’s sizeable captive insurance and reinsurance and insurance-linked securities markets.
• For more on the Bermuda Monetary Authority release, see Related Media
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