Bermuda advances insurance-linked securities market development as sector expands: ILS Bermuda

While the insurance-linked securities (ILS) market stands as foundational source of reinsurance capital and continues to expand across various products, regions and perils, ILS Bermuda has highlighted the island’s central role in driving the global sector forward.

ILS Bermuda is comprised of leading professional organisations across the global insurance-linked securities sector. The group promotes economic development through the growth of ILS and alternative risk transfer in Bermuda.

ILS Bermuda is also the organising body behind Convergence, the annual ILS industry networking and education conference which takes place this week (Artemis will be in attendance).

“Bermuda remains a leading jurisdiction for the formation, regulation, administration and listing of ILS. Its established reinsurance market, specialist service providers, proportionate regulatory framework and capital-markets infrastructure support a broad range of structures and vehicles, including catastrophe bonds, special purpose insurers, collateralised reinsurance and sidecars, while also enabling emerging forms of risk transfer,” ILS Bermuda said.

The organisation also noted that the ILS market continues to heavily expand beyond peak U.S. natural catastrophe risk, highlighting that cat bond issuance and activity in recent years has extended into emerging perils such as wildfire, European flood and convective storm, cyber, casualty, sovereign disaster relief and other specialised risks.

This shift reflects growing momentum in the ILS market, as more companies have gained greater confidence in understanding the mechanics behind catastrophe bonds, sidecars, and other risk transfer structures.

Against this backdrop, Bermuda retains its position as the global hub for the ILS sector.

Supporting this, ILS Bermuda highlighted that the island registered 25 new Special Purpose Insurers (SPIs) and 10 new collateralised insurers during 2025, while also stressing that 2026 activity remains strong, with seven new SPIs and two new collateralised insurers registered in the opening quarter of the year.

In addition, the Bermuda Monetary Authority reports that Special Purpose Insurer approvals for catastrophe bond transactions are generally completed within three days, which helps support time-sensitive issuance.

Moreover, ILS Bermuda stated that the Bermuda Stock Exchange (BSX) represents an astonishing 95.4% of the outstanding 144A and private catastrophe bond market by value.

We recently reported, that the BSX has now listed in total 169 new catastrophe bond notes and insurance-linked securities structures in the first three-quarters of 2026, maintaining its global position as ILS listings leader and becoming home to the vast majority of listed ILS issuance so far this year.

ILS Bermuda further noted that a combination of parametric structures, enhanced modelling, cloud-based analytics and artificial intelligence technologies are increasingly expanding the ways in through risks can be measured structured and transferred.

“Investors continue to value the asset class for its potential to diversify exposure away from broader financial markets, while sponsors increasingly regard ILS as a durable complement to traditional reinsurance,” ILS Bermuda added.

“The market’s next phase of development is likely to be driven by disciplined underwriting, transparent structures, higher-quality data, deeper secondary-market liquidity and new applications designed to address global protection gaps.”

Concluding: “Bermuda plays a central role in the global insurance-linked securities market and continues to advance alternative risk transfer and reinsurance. Now in its 14th year, Convergence 2026 will bring together senior leaders, investors, asset managers, reinsurers, regulators, scientists and innovators for three days of focused discussion and relationship-building.”