Industry executives discussed the continuing explosion in Bermuda’s long-term reinsurance sector during a Bermuda Risk Summit panel session at the Hamilton Princess & Beach Club.

Anam Kahn, a senior manager at KPMG in Bermuda, pointed to the growth in the US annuity market as a driver of Bermuda’s long-term reinsurance sector.

She said: “When you look at 2023 numbers, two-thirds of the business in Bermuda sits in the US annuity market. The market has been seeing a lot of good growth since the pandemic.

“In 2022, it grew 23 per cent, in 2023 another 23 per cent and last year it grew 12 per cent,” she said.

Chantal Waight, managing director, group risk and compliance, at Athene, emphasised Bermuda’s regulatory strengths and "very strong focus on governance and corporate culture".

She noted that Bermuda holds full Solvency II equivalence alongside only Switzerland and six other jurisdictions, a key factor in why global insurers find it appealing.

Norman Milner, chief risk officer at Global Atlantic, highlighted Bermuda’s governance, talent and commercial partnerships.

“I think folks underestimate and understate just the sheer advances that have been made in Bermuda over the last five to 10 years in terms of establishing an incredibly rigorous and robust governance environment,” he said. “The talent pool here is vast – actuaries, accountants, finance experts, legal tax professionals – it all comes together.”

The panellists also pointed to imported capital to support long-term insurance solutions.

Mike Downing, chief operating officer at Athene, explained: “For Athene, Bermuda creates a great opportunity to bring capital in more efficiently. A lot of our third-party capital is not just US-based; it’s capital from around the world, and the Bermuda environment is a very efficient place to bring it in. The regulatory environment also is very pragmatic.”

The discussion also addressed industry trends driving the sector’s growth, including demographic shifts and the rising demand for retirement solutions.

Ms Waight noted that by 2031, one in five Americans will be over 65, with more than 11,500 individuals turning 65 every day. “The global retirement funding gap is $51 trillion. That is huge,” she said.

Panellists highlighted the role of reinsurance in managing long-term liabilities and introducing new capital sources.

Mr Downing explained: “One of the challenges that insurance companies have is that promises tend to be long-term in nature – anywhere from 10 to 15 years for an annuity, or even 40 to 50 years for some life products. Reinsurance can help companies reposition themselves more quickly and move into more strategic areas.”

In describing the broader shifts driving demand for reinsurance, Mr Milner said: “We are seeing three powerful forces converging at once: demographic changes requiring increased retirement savings, social shifts moving obligations from government to private-sector balance sheets and a global pool of capital recognising insurance and reinsurance as an asset class.”