In the first half of 2025, Bermuda demonstrated a remarkable surge in new registrations within the catastrophe bond and insurance-linked securities (ILS) sectors. This consistent upward trend, as indicated by the Bermuda Monetary Authority (BMA), solidifies the island's status as a preeminent global center for the innovative convergence of insurance risk and capital markets. The continued expansion of these financial instruments highlights a dynamic environment where sophisticated structures are increasingly utilized to transfer and manage risk, attracting significant third-party capital.
Bermuda's ILS Landscape Flourishes Amidst Growing Registrations
Throughout the initial six months of 2025, Bermuda observed a notable uptick in the registration of diverse entities within the insurance-linked securities domain. Data released by the Bermuda Monetary Authority (BMA) revealed that the number of special purpose insurers (SPIs) registered remained consistent with the prior year, totaling 14. Among these, 13 were restricted SPIs specifically established for catastrophe bond issuances, while one unrestricted SPI offered broader utility as a multi-purpose collateralized reinsurance vehicle. This contrasts with H1 2024, which saw 14 restricted SPIs but no unrestricted counterparts.
A significant development was the registration of four new collateralized insurer class companies in the first half of 2025, an increase of two compared to the previous year. Although the BMA's report for this period did not detail intermediary registrations, a total of 18 companies with clear ILS applications were identified as newly registered by the BMA. This figure surpasses the 17 ILS-related registrations recorded in H1 2024, which included one ILS manager.
This sustained growth in registrations is particularly impressive given the evolving nature of ILS structures. Many catastrophe bond and ILS vehicles established in Bermuda are designed for multiple uses over several years, eliminating the need for a new special purpose entity for every transaction. Modern structures are increasingly capable of issuing various series of notes or preference shares and engaging with multiple counterparties, streamlining processes and enhancing efficiency.
Beyond the readily identifiable catastrophe bond and ILS entities, Bermuda also witnessed the registration of other structures designed to channel third-party capital into reinsurance opportunities, such as life and annuity reinsurance sidecar-style companies. This emerging trend further reinforces Bermuda's adaptability and leadership in facilitating sophisticated capital deployment within the reinsurance sector. In total, across catastrophe bond, ILS, and third-party capital underwriting entities, Bermuda saw 20 registrations in H1 2025, up from 17 in the corresponding period of the previous year.
Bermuda consistently reaffirms its pivotal role as the leading domicile for all forms of insurance-linked securities and for the expanding integration of third-party capital into structures that directly generate returns for investors from reinsurance activities. The vast majority of ILS issuance vehicles are registered under the BMA, and the Bermuda Stock Exchange (BSX) continues to be the primary listing venue for ILS structures and catastrophe bond notes.
This robust activity underscores Bermuda's enduring appeal as a jurisdiction that fosters innovation and stability in the global reinsurance and capital markets. Its regulatory framework and expertise continue to attract sophisticated investors and facilitate the efficient transfer of complex risks.
From a market observer's perspective, Bermuda's continued dominance in the ILS space offers compelling insights. The rising registration numbers, particularly for multi-use vehicles, reflect a maturation of the ILS market. This evolution suggests that investors and originators are seeking greater flexibility and efficiency in their risk transfer mechanisms. The island's ability to adapt its regulatory and operational infrastructure to accommodate these complex and evolving structures provides a blueprint for other financial centers aspiring to capture a share of the burgeoning alternative capital market. Moreover, the growth in third-party capital deployment into diverse reinsurance avenues, such as life and annuity sidecars, indicates a broadening acceptance and application of ILS principles beyond traditional catastrophe risks. This diversification could signal a future where ILS becomes an even more integral component of global financial architecture, offering innovative solutions for a wider array of risks and capital needs.
