Is Bermuda really still relevant as a global reinsurance hub?

New headwinds and market developments are changing the course of reinsurance – and it’s switching things up for Bermuda.

In 2025, the Prudential Regulation Authority (PRA) is entering a new phase of oversight. Its latest direction signals a clear intent to retain more reinsurance capital and activity within the UK by reducing the regulatory advantages of moving business offshore. In tandem, persistent talent shortages and the US’ tax burdens on foreign reinsurance partnerships are forcing Bermuda-based companies to stay vigilant and adaptable.

Asia is simultaneously challenging the status quo. Markets like Hong Kong and Singapore continue gaining momentum as they position themselves as key (re)insurance hubs, presenting both opportunities and competition for Bermuda and UK-based firms.

It begs the question: Is Bermuda still relevant as a global reinsurance hub, or have its twilight years finally arrived?

Undoubtedly, it remains as relevant as ever. Bermuda holds resolutely to its position as a leading reinsurance hub, maintaining strong momentum for 2026. Its robust regulatory framework, sophisticated infrastructure and strategic location make Bermuda an essential player on the world stage:

• Bermuda hosts over 1,100 (re)insurance companies
• Manages assets surpassing US$1.6tn
• Represents 35% of the world’s reinsurance capacity and 15% of global reinsurance capital

So yes, Bermuda’s relevance is undeniable – but we can’t ignore that as the reinsurance market continues to rock, so too does Bermuda’s role within it. To maintain its status in 2026 and beyond, businesses and leaders must address the evolving risks and opportunities that are shaping the future of reinsurance on the island.

Stricter UK regulation, but cross-border activity stays strong

There is a strong sentiment today that reinsurance activities need to stay within the UK. Post-brexit, people thought the UK would be more of a financial hub than it currently is, while others recognise that the horse has already bolted so you might as well chase after it.

In her September 2025 speech, Vicky White, the PRA’s Director of Prudential Policy, outlined plans to “unbundle” funded reinsurance transactions, treating them as separate components for solvency capital purposes. This approach would align the capital treatment of funded reinsurance with that of economically similar onshore structures, removing the softer capital treatment that has made offshore arrangements more attractive.

The PRA’s aim isn’t to shut down cross-border reinsurance, but to level the playing field and ensure the system supports growth, transparency, and financial stability at home.

Even so, UK life insurers tripled the amount of assets transferred to global reinsurers, contributing to a record-breaking £50bn of UK pension risk transfers, with many of these transfers being carried out in Bermuda. And with Bermuda-based Athora’s recent acquisition of Pension Insurance Corporation (PIC), the flow of cross-border reinsurance shows no sign of slowing.

Regulatory balance in the US: Greater access, persistent friction

Across the pond, Bermuda is a vital cog in the US reinsurance market, particularly in covering catastrophe risks. While the US has undergone similar regulatory changes that are complicating relationships with global reinsurers, the good news is that in 2025, Bermuda reinsurers that meet certain criteria can often transact US business without having to post collateral.

This is thanks to the NAIC’s reciprocal jurisdiction regime, a change that’s made reinsurance from Bermuda more accessible. However, the BEAT tax is still in force and can apply to reinsurance premiums paid to foreign affiliates if the taxpayer meets the BEAT thresholds. 

Bermuda faces rising competition as companies look eastward

In Asia, cities like Singapore and Hong Kong are attractive alternatives by offering more stable and predictable frameworks, combined with a focus on innovation and growth. 

Singapore, for example, has become a leading reinsurance hub due to its regulatory clarity, government incentives and strategic location. The Monetary Authority of Singapore (MAS) has encouraged reinsurance activities by striking a balance between stringent regulations and business-friendly policies, making it appealing to global reinsurers seeking growth potential.

With less friction in capital movement and growing insurance markets, Asia is well-positioned to become a global reinsurance challenger. At the same time, in 2025, many Asian reinsurers are now looking to Bermuda as a platform for global expansion. Hong Kong-based Peak Re, for example, recently established a Bermudian subsidiary to underwrite US motor and casualty business, a move that diversifies it away from catastrophe-heavy Asian risks. This underscores Bermuda’s continuing role as the hub connecting mature and emerging reinsurance markets. 

Bermuda’s talent shortage remains a pressing concern

While Bermuda’s position as a top global reinsurance hub remains strong, even in the face of stricter regulations overseas, its persistent and increasingly acute talent shortage creates some uncertainty.

• Bermuda is locked in a talent war with other global financial hubs, increasing the demand for specialised skills like actuarial science and regulatory compliance.
• A large generational gap exists on the island, with too few junior staff who are able to take on future leadership roles when the current C-suite ages out.
• Bermuda frequently tops the cost of living index. This is compounded by an ongoing housing crisis and a schooling system that might not meet the needs of expat families.

While the Bermuda Monetary Authority (BMA) is actively working to upskill its existing workforce, these issues raise questions about whether Bermuda can continue to attract and retain the talent it needs to maintain its status as a reinsurance hub.

The pressure is on for companies on the island. Succession planning initiatives like leadership development programmes will be essential for bridging the talent gap so that Bermuda can continue meeting growing market demand.

Companies also need to think outside the box by leveraging their global networks to tap into alternative pools, and strengthening their employer branding. Showcasing the island’s unique selling points, like career growth opportunities and quality of life, as well as offering workplace perks and competitive relocation packages, is essential for crafting an employer brand that top-talent is attracted to. 

Navigating the future

So, is Bermuda still relevant as a global reinsurance hub? The answer is an unequivocal yes. Its insurance market remains robust, and confidence in it is well-founded. One recent analysis confirms that in 2025, Bermuda’s reinsurance market is stable, well-regulated and low-risk.

Bermuda’s adaptability has been a cornerstone of its success. The island has shown time and again that it can pivot in response to global market shifts, and today is no different.

The biggest challenge for both Bermuda-based reinsurers and international firms with ties to Bermuda lies in adapting to stricter regulations. Both will need to:

• Enhance their compliance frameworks by adopting advanced regulatory technologies to ensure real-time monitoring and reporting, while also fortifying risk management teams.
• Build stronger relationships with regulators through proactive communication to anticipate and address potential challenges. 
• Diversify portfolios, particularly by exploring niche markets or innovative risk transfer mechanisms, as a strategic way to stay agile during regulatory shifts. 

Understanding the nuances of these market developments and how they impact Bermuda is crucial for making strategic decisions and navigating these changes effectively.

For targeted help navigating this new terrain, contact me directly.