Bermuda Reinsurance Market Transformation Since 2005
Following the 2005 hurricane season, Bermuda's reinsurance industry underwent a significant transformation. The catastrophic impact of Hurricanes Katrina, Rita, and Wilma resulted in insured losses between $65 billion and $90 billion, driving substantial capital influx. Approximately $30 billion entered the sector, with $9 billion directed towards new start-ups, predominantly based in Bermuda. This movement mirrored past patterns observed after major events like Hurricane Andrew in 1992 and the September 2001 terrorist attacks, leading to the establishment of numerous reinsurance entities in Bermuda.
Most reinsurance companies from the "Class of 2005" have since experienced mergers and acquisitions. Notable cases include Harbor Point Re's merger with Max Capital to form Alterra Capital, and Validus Re's acquisition of Flagstone Re before its purchase by AIG. Among these changes, Ariel Re remains one of the few independent firms, currently managing a yearly premium volume of approximately $1.5 billion.
The Bermuda reinsurance market has experienced significant growth, with 2024 figures indicating a 10% increase in gross written premiums, surpassing $188 billion. However, the emergence of a new cohort similar to the "Class of 2005" is unlikely. In 2025, global reinsurance capital reached unprecedented levels, ranging from $660 billion to $735 billion, depending on the source. Additionally, Moody’s Ratings forecasts a 15% decline in property catastrophe reinsurance pricing, which dampens the prospects for new market entrants.
Alternative capital has notably disrupted traditional reinsurance models. Instruments like insurance-linked securities (ILS) and catastrophe bonds now account for about 17% of global reinsurance capacity, marking a 68% increase since 2015. This trend offers investors opportunities to engage in reinsurance risk without establishing fully financed companies, reshaping industry dynamics.
Recent years saw limited new market entries, including the "Class of 2025" firms like Mereo Insurance and Oak Reinsurance. However, the planned launch of Alpine Re, with a $1 billion capital target, was shelved due to funding challenges.
Upcoming Bermuda Risk Summit
The forthcoming Bermuda Risk Summit in March 2026 will commemorate the "Class of 2005" with a panel discussion featuring industry executives, including John Berger of Coaction Specialty Insurance and Ryan Mather of Ariel Re. The summit will feature keynotes from Bermuda Premier David Burt and cover sessions on AI, private credit, and wildfire risks. The previous year’s event attracted over 400 participants from various countries, highlighting the international interest in Bermuda's reinsurance landscape.