ALIRT Insurance Research, a US insurance research and analytics firm specialising in financial analysis of insurance companies, has released a new report examining the increasing use of offshore reinsurance by the US life insurance sector.
The firm’s latest analysis indicates that Bermuda continues to strengthen its position as the leading overseas destination for life and annuity reinsurance ceded by US insurers.
According to ALIRT Insurance Research, US life insurers had approximately $2.7 trillion in ceded life and annuity liabilities at the end of 2025. The company said around $1.1 trillion of those liabilities had been transferred to Bermuda-based reinsurers, representing 40.7% of all ceded liabilities and around 85% of business placed with reinsurers outside the United States.
ALIRT said Bermuda’s share of the market has risen steadily in recent years. Its analysis found that reserves ceded to Bermuda more than doubled between 2021 and 2025, while the jurisdiction’s share of total ceded US life and annuity reserves increased from 30.9% to 40.7% over the same period.
The report states that the majority of this expansion has taken place since 2017. According to ALIRT, roughly 92% of Bermuda-ceded reserves outstanding at the end of 2025 originated from transactions completed between 2017 and 2025. The company said this activity has included both affiliated and third-party reinsurance arrangements covering life insurance, annuities, pension risk transfer business, structured settlements and legacy books of business.
ALIRT also identified continued growth in newly established Bermuda reinsurers and sidecar structures. The firm reported that reinsurance entities created since 2017 have accumulated close to $355 billion in assumed reserves, making them a significant contributor to the market’s overall expansion.
The company’s research found that more than $73 billion of new Bermuda reinsurance transactions were completed by US life insurers during 2025. ALIRT said the ten largest transactions accounted for approximately $60 billion of that volume and included affiliated deals, third-party reinsurance agreements and sidecar structures backed by external investors.
According to ALIRT, a range of commercial and strategic considerations continue to support the use of Bermuda reinsurance. These include greater flexibility in capital management, additional capacity to support new business, management of legacy insurance portfolios and access to third-party sources of capital.
At the same time, the company noted that regulators and market participants remain focused on issues including reserve adequacy, investment portfolios, counterparty exposure and affiliated transactions.
ALIRT said regulatory developments in both Bermuda and the United States are expected to shape the market’s future development. The report points to measures such as enhanced liquidity testing, broader reporting obligations, reserve adequacy assessments and increased regulatory scrutiny of affiliated transactions and sidecar structures.
The report also notes that the Cayman Islands is attracting increased attention as an alternative location for life and annuity reinsurance activity. However, ALIRT said Bermuda continues to retain its dominant position despite the emergence of new reinsurers and strategic partnerships elsewhere.
ALIRT concluded that reinsurance now plays an increasingly important role in the risk and capital management strategies of many US life insurers. The company said the market is likely to remain under close observation as insurers, regulators and other stakeholders seek to balance capital efficiency with financial resilience and the protection of policyholders.
