Nature of Bermuda’s growing life reinsurance market is evolving: Cooper, PwC Bermuda

The Bermuda life reinsurance market has expanded rapidly in recent times, and in 2024 alone, the Bermuda Monetary Authority (BMA) has licensed an additional seven new players, while both existing and new entities have looked to innovate and refine their offerings, according to Damian Cooper, an experienced audit focused Partner in the Insurance team at PwC Bermuda.

Cooper joined our insurance-linked securities (ILS) focused sister publication, Artemis recently for a live video interview to discuss the current state and evolution of the life reinsurance market in Bermuda.

In his role with PwC Bermuda, Cooper has a focus on the reinsurance industry, particularly the life space, and also leads the company’s capital markets, accounting and regulatory advisory practice within Bermuda.

“The Bermuda life reinsurance market has been growing at a pretty rapid rate over the past eight or nine years, and we’re talking about an average of 10 new reinsurers being licensed each year over that period,” said Cooper.

This growth, he explained, has taken the total assets under management to well over the trillion dollar mark on the island.

From January 1st to the end of July 2024, the BMA, the regulator of the financial services sector in Bermuda, has licensed a further seven new life reinsurers.

“So, we’re still seeing the continuation of that trend of new registrations and incorporations coming through,” continued Cooper.

While a strong trend of new life reinsurer formations is welcomed, Cooper emphasised that within that relatively short timeframe, it’s interesting that the nature of Bermuda’s life reinsurance market has been evolving.

“So, both new and existing reinsurers have sought to innovate and refine their offerings and what they offer in terms of the nature and geographic location of risk being assumed. Sources of capital, so the use of third-party capital, which you referred to earlier, has become an increasing feature of the market. And the structure and relationship between ceding companies and affiliate reinsurance and then also asset managers supporting the reinsurance industry,” said Cooper.

In the Artemis Live video interview, Cooper provided some thoughts on what’s driving the success of the life reinsurance sector for Bermuda.

“I think it’s a combination of factors, actually. So, Bermuda has a strong tax record of supporting global capital markets through the P&C reinsurance industry, and it’s been able to build on that foundation to create the success in the life reinsurance industry.

“On island, we have a well-established regulator and a well-regarded regulatory framework that is designed to actually support new entrants as well as existing players,” he said.

On top of this, continued Cooper, Bermuda is recognised for its ability to facilitate the incorporation of new companies and execute on contracts, and also boasts a broad talent pool of professionals focused on innovation.

“And then, supporting all of that, you have a network of advisors and service providers that are there to assist entities in a cost effective way as they grow,” said Cooper, adding that the costs of starting up in Bermuda are fairly low as a result of the nature of the environment on island.

“So, that environment there encourages the innovation, encourages people to have confidence setting up. And actually, when the first and second wave are very successful entrants into the market, it spurs the future growth, right. So, it’s then building on what we’ve seen. People are always happy to be fast followers on the success of others, and that’s the trend I think we’ve really seen over the past five years in particular in Bermuda. It’s people seeing the success of the early adopters and looking to replicate that structure here,” said Cooper.

The full video interview with PwC Bermuda’s Damian Cooper is embedded below and can also be viewed, along with previous Artemis Live video interviews, on the publication’s dedicated video page.

You can also listen in audio to all of these interviews by subscribing to the Artemis Live podcast here.

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