Bermuda life reinsurers face rotation as early capital matures

Bermuda's long-term insurance sector held more than $1.5 trillion of assets under management at the end of September 2025, according to Bermuda Monetary Authority figures cited by the Royal Gazette.

Serenova Re president Matthew Roche told the PwC Insurance Summit that some of the capital deployed in the sector five or ten years ago is approaching the end of its life cycle. "Some of the initial capital that was deployed in this sector, maybe five or ten years ago, that's going to start coming to the end of its life cycle," he said. "There will need to be rotation, new structures, new investors coming in, potential M&A."

For an allocator, the three routes Roche named are three different counterparties at the end of a deal's life, each with its own terms. An investor holding Bermuda life and annuity exposure is ultimately underwriting whoever stands behind the liability once the original capital retires. A manager selling a new strategy can be asked which of the three — a replacement investor, a restructured vehicle or a buyer of the whole book — its own vintage assumes.

The sector's scale is recent. In about a decade it has grown from almost nothing into the world's largest reinsurer of life and annuities, backing hundreds of billions of dollars of pensions worldwide, the Gazette reported.

Cynthia Smith, chairwoman and chief executive of Chariot Re, said Bermuda had attracted about 84% of all life and annuity reserves outsourced overseas by life insurers. She credited much of that to the Bermuda Monetary Authority. "They have built an incredible brand that's based on discipline, collaboration, transparency," she said. Smith also said the regulator's scrutiny of whether life reinsurers' investments suit their liabilities was good for the jurisdiction in the long term, despite creating hurdles for companies conducting transactions.

Roche said he expected the market to keep attracting capital provided returns meet investors' expectations, and called the buildout of a strong regulatory framework an important strength. "I have a lot of confidence that it will be here for the long term, especially given all the knowledge and the track record that's been building over the past few years," he said. He also said the innovation that created the market will be needed again for the transition: "Our market here barely existed around ten years ago — it came about largely through innovation of the people doing these transactions."