The Bermuda Prudential Solvency Regime
Bermuda has long held a prominent position in the global insurance and reinsurance sectors, a status solidified by its pioneering work in the establishment and regulation of captive insurers beginning in the late 1960s and early 1970s. The island’s forward-thinking approach, business-friendly environment, and entrepreneurial spirit have been instrumental in its success.
For example, the number of captive insurers operating in Bermuda has grown dramatically. In the early 1970s this number was approximately 150, but by 2024 had surged to over 600. This growth confirms Bermuda’s position as a major player in this international market. Presently, more than 30 leading international insurance and reinsurance companies conduct underwriting activities from Bermuda. The recent expansion of long-term life and annuity liabilities is particularly noteworthy.
The Association of Bermuda Insurers and Reinsurers (ABIR) notes that Bermuda is the largest provider of catastrophe reinsurance to US insurers. This underscores the vital role Bermuda plays in providing stability to both the U.S. and international reinsurance markets. In addition to its strong regulatory framework, Bermuda’s favorable tax regime allows reinsurers to operate with improved capital efficiency.
Bermuda’s history of innovation in the insurance markets, combined with the ease of doing business there, continue to make it a popular jurisdiction in the insurance and reinsurance markets. Consistent with its commitment to international compliance standards, Bermuda recently introduced corporate income tax legislation for businesses meeting specific income thresholds.
