Bermuda Commercial Claims Costs Topped $1 Trillion over 9 Years

Bermuda-based commercial insurers and reinsurers incurred $1.1 trillion in gross claims costs to policyholders and cedents globally over the 9-year period from 2016 to 2024, according to the Bermuda Monetary Authority (BMA).

The claims costs covered large catastrophes, property and casualty losses, as well as life insurance claims for policyholders' dividends, surrenders, maturities, annuities (including payments for financial and biometric risks), accident, and health benefits, the BMA said.

The claims cost information is based on data the BMA compiled from claims surveys and annual statutory filings of commercial insurers.

The claims cost information relates to the direct insurance and reinsurance business of 360 commercial insurance and reinsurance companies and does not include data from Bermuda's captive insurance and reinsurance and insurance-linked securities markets.

Over the 9-year period from 2016 to 2024, Bermuda insurers and reinsurers incurred a total of $831 billion in gross claims costs to US, Europe, and UK policyholders and cedents, the BMA said, compared to $282 billion incurred during the 20-year period from 1997 to 2016.

"The Bermuda (re)insurance market has a long history of demonstrating resilience through major stress events, including the 2007/08 global financial crisis, the COVID-19 pandemic, increased frequency and severity of natural catastrophe events, geopolitical turmoil, high inflation, and interest rate volatility," Craig Swann, the BMA's chief executive officer, said in a statement. "The claims data indicate that despite these challenges, Bermuda's (re)insurance market and robust regulatory framework have enabled (re)insurers to maintain adequate capitalization and ample liquidity, ensuring the settlement of policyholder claims as they arise."

"Advanced technologies, including artificial intelligence, are poised to play a transformative role in the insurance sector, offering material benefits to (re)insurers," Gerald Gakundi, deputy managing director, supervision (insurance), said in the statement. "Notwithstanding these advancements, significant loss events affecting life and property will inevitably persist, continuing to present substantial challenges. In such circumstances, policyholders rely on the established strength and reliability of Bermuda's (re)insurers. The BMA remains committed to the responsible implementation of its regulatory framework to reinforce the resilience of (re)insurers, support the development of sustainable business models, and encourage responsible product innovation."