Bermuda's $1.34 trillion claims record skips the ILS market

The $1.34 trillion in gross claims costs that Bermuda's commercial re/insurers incurred over the past decade, nearly one fifth of it paid out in 2025 alone, is the claims-paying record of traditional balance-sheet carriers. The Bermuda Monetary Authority's tally, drawn from regulatory filings and periodic claims surveys, spans catastrophe and other property-casualty losses, life and health claims, accident and health benefits, and policyholder cash flows including dividends, surrenders, maturities and annuity payments.

The same tally explicitly excludes the island's captive insurers and insurance-linked securities markets: the sidecars, cat bonds and other collateralized vehicles that made Bermuda the center of the ILS world. US policyholders absorbed $827 billion, or 62%, of the decade's payouts, with European policyholders including the UK receiving $201 billion and the rest of the world $309 billion.

Craig Swan, the BMA's chief executive, called the decade 'a testament to promises kept,' and Gerald Gakundi, deputy managing director for insurance supervision, credited 'rigorous capital standards' and 'prudent risk management.' The same regulator has spent recent weeks proposing cross-border liquidity tests for Bermuda's three internationally active groups and watching AM Best flag a collateral gap in offshore annuity reinsurance, where reserve credits are rising faster than the assets backing them. As this publication has argued, the collateral behind offshore life cessions is the next regulatory fault line.

The payout gives Bermuda's ILS regime a powerful sales line. The test ahead is whether sidecar and cat-bond capital can point to an equivalent payout history when regulators ask the same liquidity questions—and whether investors keep treating 'Bermuda-licensed' as a synonym for 'claims-paying' once that record is attributed to balance-sheet carriers.