About $1.1 trillion of the $2.7 trillion in life and annuity liabilities ceded by US life insurers as of year-end 2025, were ceded to Bermudian-based reinsurers, new Alirt research has reported.

This represented 40.7 per cent of all ceded liabilities and 85 per cent of liabilities ceded to non-US jurisdictions.

The Alirt Insurance Research report remarked how Bermuda reinsurance activity has expanded rapidly in recent years.

It said: “Between 2021 and 2025, reserves ceded to Bermuda more than doubled, while Bermuda's share of total ceded US life and annuity reserves also grew from 30.9 per cent in 2021 to 40.7 per cent in 2025.

“The report notes that much of the growth has occurred since 2017, with approximately 92 per cent of outstanding Bermuda-ceded reserves at year-end 2025 stemming from transactions initiated between 2017 and 2025.

“Industry activity has been driven by both affiliated and third-party transactions covering annuities, life insurance, pension risk transfer business, structured settlements, and legacy insurance blocks.”

The report also identifies substantial growth in newly established Bermuda reinsurers and sidecar structures.

Since 2017, recently formed Bermuda reinsurance entities have accumulated nearly $355 billion of assumed reserves, representing a significant portion of the market's overall expansion.

“During 2025 alone, US life insurers completed more than $73 billion of new Bermuda reinsurance transactions,” the report said.

“The ten largest transactions accounted for approximately $60 billion of that total and included a mix of affiliated transactions, third-party reinsurance arrangements, and sidecar structures supported by outside investors.

“The analysis highlights several factors contributing to the continued use of Bermuda reinsurance, including capital management flexibility, support for new business growth, management of legacy blocks of business, and access to third-party capital.

“At the same time, the report notes ongoing industry and regulatory focus on reserve adequacy, investment portfolio composition, counterparty risk and affiliated transactions.

“Recent regulatory developments in both Bermuda and the United States are expected to influence the future direction of the market. Regulatory initiatives have included enhanced liquidity testing, expanded reporting requirements, reserve adequacy reviews, and increased scrutiny of sidecar structures and affiliated transactions.”

In addition to Bermuda, the report notes growing interest in the Cayman Islands as an alternative jurisdiction for life and annuity reinsurance activity.

Several new reinsurers and strategic partnerships have emerged in recent years, though Bermuda continues to maintain a leading position within the market.

The report concludes that reinsurance has become a core component of risk and capital management strategies for many US life insurers.

It said: “As the market continues to evolve, insurers, regulators, and other stakeholders are expected to remain focused on balancing capital efficiency, financial strength, and policyholder protection.”