Bermuda’s insurance and reinsurance sector continues to attract record levels of private capital, supported by a regulatory framework and governance culture that executives said distinguished the island in a changing market.

The island’s private credit market has reached roughly $135 billion, with about $40 billion flowing in between 2020 and 2022, according to panellists at the recent PwC Insurance Summit at the Hamilton Princess & Beach Club.

The panel, moderated by Financial Times reporter Antoine Gara, featured Anup Seth, chief executive of Agam Bermuda; Danish Iqbal, chief executive of Somerset Re; and Andrew Sooboodoo, chief risk officer at InEvo Re.

Mr Gara said recent turmoil abroad has sharpened global attention on oversight. “There have been some negative examples, right? We’ve had private equity-backed insurance companies in Europe, some in the US fail, and it allows us to talk a little bit about how to control governance,” he said.

In the United States, for instance, several insurers tied to private-equity owner Eli Global were placed into rehabilitation or liquidation after regulators flagged asset-shifting and weak controls.

European regulators have also blocked or scrutinised attempts by private-capital firms to acquire life insurance portfolios, citing concerns about short-term investment strategies backing long-term liabilities. The Bank of England has warned that private-equity-backed insurers tend to hold more illiquid, higher-risk assets, raising liquidity-stress concerns.

Mr Seth said the failures highlight why governance was central in Bermuda. “There’s no substitute for strong governance, and it really starts at the top of the organisation and the board’s responsibility,” he said, adding that roles such as chief investment officer must operate independently from ownership to make sure decisions are unbiased.

He also pointed to the quality of capital entering the market. “The capital that's coming to this industry is earning capital, and also it’s high quality capital, so that alignment between the permanency of the capital and the long nature of our liabilities and policyholder benefits means we’re here for the long term to meet those claims.”

Mr Iqbal cited the sector’s discipline. “Ninety-four per cent of the bonds are investment rated,” he said. “We’re not playing with credit risk.”

Risk management and regulation were also highlighted. Mr Seth urged firms to watch “liquidity, leverage and market needs” and praised the Bermuda Monetary Authority. “The BMA has done a fantastic job of enhancing regulatory collaboration. It’s an extremely incredible regulator we have,” he said.

He added that innovation was expanding the capital base. “We’re bringing in not just PE capital. We’re bringing in family offices, sovereign wealth funds and venture pension funds. All that capital is now coming into the industry in the form of sidecars, helping to narrow that protection gap where it’s creating enormous new capacity.”