Bermuda is marking a decade of Solvency II equivalence with Ten Years of Solvency II Equivalence, a new report produced by the Association of Bermuda Insurers and Reinsurers (ABIR), which represents Bermuda’s commercial insurance and reinsurance sector, in partnership with the Centre for European Policy Studies (CEPS) and the European Capital Markets Institute (ECMI), examining the role of Bermuda’s commercial reinsurance market in providing risk-bearing capacity to European insurers.
The report comes as Bermuda marks 10 years since it secured full Solvency II equivalence on 1 January 2016. The status covers reinsurance, group solvency and group supervision and places Bermuda among a small number of non-EU jurisdictions recognised under the European regulatory framework.
For the European reinsurance market, the report examines the significance of Solvency II equivalence beyond Bermuda itself, focusing on its implications for insurers across the European Economic Area (EEA) and, in particular, the region’s access to international risk-bearing capacity.
Mark Cloutier, Chair of ABIR, stated: “Bermuda’s leading re/insurers appreciate the value of Solvency II equivalence to the commercial market, and therefore Bermuda’s economy as a whole. Without equivalence, our commercial reinsurers and groups would face much higher regulatory and administrative hurdles, making it more difficult to write business into the important European market. At the same time, it would also make it much harder for European insurers to access a broader scope of counterparties, capital sources and expertise in Bermuda.”
“ABIR congratulates the Bermuda Monetary Authority for its foresight in seeking full equivalence in all three areas of Solvency II (reinsurance, group solvency and group supervision) in the years immediately preceding 2016,” Cloutier continued. “We look forward to the continued evolution of the EU insurance/Bermuda reinsurance relationship and stand ready to assist build capacity in additional ways for future decades to come.”
John Huff, President & CEO of ABIR, commented: “We previewed the ‘Ten Years of Solvency II Equivalence’ Report in Europe for the ABIR 19th Annual International Insurance Regulatory Dialogue in Brussels in early September 2026.”
According to figures highlighted by ABIR from the report, reinsurance represented 18.8% of total gross written premiums across the EEA’s insurance and reinsurance sectors in 2023, amounting to €229.5 billion. The figures illustrate the scale of reinsurance within the wider European insurance market and the role of international counterparties in supporting that capacity.
“While the economic significance of Solvency II equivalence for Bermuda has already been much discussed, this new Report describes in unprecedented detail the impact of Solvency II equivalence on the European Economic Area (EEA), especially in its ability to access international risk bearing capacity,” Huff further added. “For example, the Report shows how in 2023, reinsurance accounted for 18.8% of total gross written premiums in insurance and reinsurance sectors across the EEA, equivalent to €229.5 billion.”
ABIR said the report also demonstrates the extent to which European reinsurance business is placed with counterparties outside the EEA. Around 38% of EEA reinsurance transactions involved third-country counterparties, according to the figures cited in the report, while 21% involved jurisdictions recognised as equivalent under Solvency II.
The Bermuda market has also been a significant source of claims-paying capacity for European risks. ABIR said Bermuda commercial re/insurers reported €80 billion ($93 billion) in gross claims associated with EU entities over the nine years from 2016 to 2025.
The report further points to the market’s role in catastrophe risk transfer. In 2024, Bermuda re/insurers assumed €212 billion in gross catastrophe loss exposure, with ABIR stating that they continued to maintain sufficient capital to meet policyholder obligations and regulatory capital requirements.
Apostolos Thomadakis, Senior Research Fellow and Head of the Financial Markets and Institutions Unit at CEPS and Head of Research at ECMI, stated: “With diverging regulatory regimes and increasing need for capital and risk-taking capacity in Europe, the ability to recognise the same prudential results in different regimes will become increasingly relevant.
“For Europe the conclusion is clear: regulatory openness does not imply lowering of standards. High standards simply do not have to look identical in all countries.”
“In essence, the ‘outcomes-based’ spirit of Solvency II equivalence has helped the EU to rely on another jurisdiction’s regulatory and supervisory framework to achieve sufficiently comparable outcomes. Regulators from different countries effectively say to each other, although we might not take the same route, we reach the same destination. ABIR looks forward to building upon this decade of supervisory cooperation by solving other capital investment critical issues for the EEA.”
The report puts the ten-year milestone in the context of a European insurance market that continues to use international reinsurance to transfer catastrophe and other large-scale risks. For Bermuda’s commercial reinsurers, the equivalence framework remains a key part of their ability to participate in that cross-border market.
