This chapter discusses the Bermudian prudential solvency regime. Bermuda rose to prominence in the insurance and reinsurance industries in the late 1960s and early 1970s, largely due to its pioneering work in the establishment and regulation of captive insurers. The island’s forward-thinking, business-friendly and entrepreneurial atmosphere was instrumental in this progress. For instance, the number of captive insurers in Bermuda grew from approximately 150 in the early 1970s to over 600 in 2024, solidifying Bermuda’s status as a significant player in the global market.
Today, more than 30 major international insurance and reinsurance firms underwrite from Bermuda. The recent growth in long-term life and annuity liabilities is remarkable. The Association of Bermuda Insurers and Reinsurers notes that Bermuda is the largest supplier of catastrophe reinsurance to US insurers. Bermuda therefore plays a vital part in the US and international reinsurance markets.
Along with being highly regarded from a regulatory perspective, Bermuda’s favorable tax regime allows reinsurers to operate with greater capital efficiency. The island’s history of innovation in the insurance markets, along with the ease of doing business there, also makes it a popular jurisdiction in the insurance and reinsurance markets. Consistent with its commitment to compliance with international standards, Bermuda has recently introduced corporate income tax legislation for businesses meeting certain income thresholds.
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