Global reinsurers, including several major Bermuda market players, appear capable of withstanding increasingly severe climate-related catastrophe losses without widespread ratings pressure, according to a new stress test from S&P Global Ratings.

The report found that most rated insurers and reinsurers could likely absorb a one-in-250-year natural catastrophe event because of their strong capitalisation, use of reinsurance and retrocession and prudent risk management.

S&P said: “Our assessment highlights the strength of credit quality among most rated insurers, even when exposed to severe natural catastrophes.”

Among Bermudian-based or Bermudian-linked reinsurers included in the study were RenaissanceRe Holdings Ltd, SiriusPoint Ltd, Convex Re Ltd, Ascot Group Ltd and Fidelis Insurance Holdings Ltd.

Bermudian-based carriers are expected to absorb close to $10 billion in insured losses from the January 2025 California wildfires, while total catastrophe exposure underwritten from the island exceeds $220 billion globally, according to regulatory and market estimates.

The report noted that insured cat losses globally exceeded $100 billion in 2025 for the sixth consecutive year, reflecting what S&P described as “a reality where extreme weather is increasingly common”.

Even so, the ratings agency found that the 50 largest insurers kept an average 18 per cent capital surplus after the simulated event.

Together, the insurers faced roughly $430 billion in gross cat exposure during the stress scenario. Reinsurance and retrocession reduced that exposure to about $225 billion net, or about 15 per cent of capital.

S&P added that catastrophe premium income further reduced residual exposure to roughly 8 per cent of capital, meaning much of the impact could be absorbed through annual earnings.

The agency said: “Our stress test highlights that our credit ratings appropriately incorporate exposure to natural catastrophes.”