The highest number of new insurance companies in almost a decade were registered by the Bermuda Monetary Authority in 2022 as the expansion of the long-term insurance sector continued, the BMA reported today.

The addition of 15 insurers in December took 2022’s total of new registrants to 84, well above the 2021 total of 65, and the highest since 2014 when 93 were registered.

Of the 2022 total, 80 are insurers and four are intermediaries, the highest number of insurers since 2013, when 91 were added to the BMA’s books.

It is also well ahead of 2020’s total of 78 and 2019’s total of 72.

Leading the way for 2023 were 24 special purpose insurers (SPIs) which are primarily used in the burgeoning insurance-linked security market.

Nine Class E insurers — long-term insurers with more than $500 million in capital — were also registered, as were nine Class A to C insurers, which are smaller long-term re/insurers.

The BMA also registered 16 Class 1 and Class 2 insurers, which are generally captives, along with 15 forms of Class 3 insurers and one Class 4 — Fortitude International Reinsurance — which are the heaviest capitalised of the non-life or long-term insurers.

Four digital insurers were also registered.

Registered in December were five Class E insurers, three Restricted SPI, two insurers in each of Class 3A and Class C, and one each in Classes 2, ILT and Unrestricted SPI.

The growth in SPIs comes amid optimism that the catastrophe bond market will see growth in 2023. Fitch Ratings reported that catastrophe bonds, as a component of the alternative reinsurance capital space, have “gained in importance at the expense of collateralised reinsurance programmes and sidecars in 2022, continuing a trend that started in 2019”, according to ILS news website Artemis.

“Investors stuck to their preferences as catastrophe bonds offered higher liquidity, a better performance and a more clear-cut definition of what perils are covered,” the rating agency added.

The long-term insurance sector has seen rapid growth in the past decade, with one expert predicting it would soon see more than $1 trillion in assets under management.