Bermuda’s long-term insurance sector remains strongly capitalised and highly resilient, even under a simulated global financial crisis, according to the Bermuda Monetary Authority’s latest market analysis and stress-testing report.

“The results of the GFC stress test demonstrated the Bermuda long-term reinsurance sector's strong ability to withstand severe economic challenges,” the BMA said in its Bermuda Long-term Insurance Market Analysis and Stress Testing Report.

The report shows that the sector continued to grow rapidly in 2024, with total assets rising 19.1 per cent to $1.52 trillion and gross written premiums increasing 17.8 per cent to $200.1 billion. Net income more than doubled to $26.3 billion, supported by higher interest rates and strong investment returns.

Despite that expansion, regulators said capital buffers remained well above required levels.

“Most insurers maintain capital levels well above regulatory requirements, even under severe stress conditions,” the BMA said.

The authority tested insurers against a range of severe but plausible market shocks, including sharp equity declines, widening credit spreads and a scenario calibrated to replicate the 2008 global financial crisis. The vast majority of firms remained above minimum solvency thresholds, even after absorbing the simulated losses.

Liquidity was also a key strength across the sector, with insurers holding a large share of assets in cash and highly rated bonds.

“Bermuda long-term insurers continue to maintain a substantial portion of their assets in liquid forms,” the BMA said.

The report found that the median liquidity coverage ratio stood far above the regulatory minimum, meaning firms would be able to meet policyholder obligations even under severe stress scenarios.

While the overall picture was resilient, the BMA said that it continued to monitor credit risk and recovery planning at individual firms.