Bermuda’s reinsurance sector appears to be setting the pace for a global shift in insurance investment strategies as major firms around the world move towards sidecars and other hybrid capital and management models long established on the island.

According to the newly-released 2025 BlackRock Global Insurance Report, nearly 9 in 10 insurers (87 per cent) are changing how they manage assets, with most adopting hybrid frameworks that combine in-house expertise with external partners.

The report also found 67 per cent plan to use reinsurance sidecars, 54 per cent expect to increase their use of third-party capital and 53 per cent intend to expand captive management capabilities — all tools that have helped define Bermuda’s reinsurance market.

Bermuda pioneered the use of sidecars, with collateralised special-purpose insurers set up in the 1990s and early 2000s to absorb catastrophe risk and bring in third-party capital, according to ILS Review.

The BlackRock study, which surveyed 463 executives representing $23 trillion in assets under management, noted that the appetite for private assets remains strong even as risk tolerance has dropped to historic lows.

Thirty per cent of insurers expect to boost allocations to private markets over the next 12 months, targeting direct lending, infrastructure debt and multi-alternative strategies.

Among those leading the trend is Fortitude Re, one of Bermuda’s largest life and annuity reinsurers. Its chief investment officer, Jeff Mauro, told the report’s authors that Fortitude Re was taking a “more selective approach” to private markets amid tightening spreads, focusing on “less trafficked asset classes” and “proprietary origination channels” to achieve better risk-adjusted returns.

The report also identified strong investment in technology, with 73 per cent of insurers adopting artificial intelligence-driven tools for portfolio management and underwriting.