Bermuda’s life & annuity sidecar market hits $375bn amid rising private-market strategies: Morningstar DBRS

The life and annuity sidecar market in Bermuda has experienced rapid growth over the last several years, as insurers continue to scale up and expand beyond legacy blocks. However, Morningstar DBRS suggests that this momentum can also be viewed alongside the growth of rated feeder funds, as both structures highlight how insurance capital is increasingly being deployed into private-market strategies.

According to the agency’s latest report, the sidecar market in Bermuda, when measured by assumed liabilities, has grown to a staggering $375 billion as of 2025.

This growth is driven by the establishment of an influx of new sidecars, as well as expansions of existing ones, a trend that Morningstar DBRS states is likely to persist.

Examples of life and annuity reinsurance sidecars that were launched in 2025 include, Fortitude Carlyle Asia Reinsurance, Ltd. (FCA Re), which was set up via a joint initiative between Fortitude Re and global investment firm Carlyle, and capitalized with more than $700 million in deployable capital, comprising both equity and anticipated debt capacity.

Meanwhile, Chariot Reinsurance (Chariot Re), a Bermuda-based life and annuity reinsurance sidecar company launched by MetLife, Inc. in partnership with investor General Atlantic, was also launched in 2025, and went on to complete its first transaction, assuming $10 billion of liabilities in July 2025. Just this week, Chariot Re raised additional capital to continue its expansion.

In addition, in 2026, Wilton Re partnered with Sun Life to launch Windsor Life Re, a new U.S. and Bermuda based company that will initially act as a kind of life and annuity reinsurance sidecar for the company and is expected to deploy around US $900 million in capital.

There has also been the recently established West Grove Re Ltd., a Bermuda based reinsurance sidecar that was launched by international life and annuity insurance specialist Talcott Financial Group. This structure was capitalised with around $1 billion, following a fundraising effort conducted in partnership with Goldman Sachs.

As a reminder, you can find details of numerous reinsurance sidecar investments and transactions, including life and annuity reinsurance sidecar structures, in our directory of reinsurance sidecar transactions.

“While recapture mechanisms exist, as with some other L&A reinsurance arrangements, there have been no recaptures from existing sidecars to the best of our knowledge. Deals are staying in force, and new ones are being layered on top. These trends support continued expansion in both the number of sidecars and the amount of reserves assumed by these structures,” Morningstar DBRS said.

Adding: “Although we focused on estimating the size of the sidecar market in Bermuda, which is by far the largest, the Cayman Islands is another emerging domicile, with examples such as Malibu Life Re and Fort Greene Re, which appeared in 2024 and 2025, respectively. As the market evolves, the list of L&A sidecars has grown with new and repeat vehicles.”

Notably, the agency’s analysts also observe that reinsurance sidecars have so far primarily concentrated on annuity-like products, which includes fixed annuities, fixed indexed annuities, multiyear guarantee annuities, structured settlement annuities, and pension risk transfers.

Whilst sidecar transactions were initially established mostly for block insurance business, recent agreements tend to include flow transactions, which allows the vehicle to take on new business as it gets written, which supports the outlook of further growth.

“Most sidecars still transact largely within their sponsor’s corporate group. Some have taken on business from unaffiliated carriers, but such deals have been limited. For example, the Massachusetts Mutual Life Insurance Company-sponsored sidecar, Martello Re, assumed pension risk transfer transactions from Metropolitan Tower Life Insurance in 2023. Subsequently, Metropolitan Tower established its own sidecar, Chariot Re, in 2024. While this shows that unaffiliated transactions can happen, the follow-on move suggests insurers prefer to keep these structures in-house,” Morningstar DBRS explained.

Further into the report, Morningstar DBRS’ analysts highlight how rated feeder funds and sidecars are pushing insurance capital deeper into private markets and contribute towards fund managers’ assets under management (AUM) growth.

However, while feeder funds do not tend to invest directly into sidecars, both structures do allow insurance capital to connect with private-market strategies. This is evident by the way that sidecars deploy capital through portfolios backing reinsured liabilities, while rated feeder funds provide insurers with rated exposure to private-market funds.

“Their common link is the use of structured vehicles to broaden private-market access and potentially improve capital efficiency, although neither eliminates the underlying credit, liquidity, or investment risks,” Morningstar DBRS’ report explains.

Adding: “While public disclosure of sidecar investments is generally limited, we receive private disclosure for underlying investment portfolios of rated feeder funds during the credit rating process, which provides a high level of transparency. Rated feeder funds typically invest in a single-credit fund. Generally, feeder funds issue debt and raise equity, with the proceeds from both sources invested in a main fund through the purchase of the main fund’s equity interests. The main funds are structured as fixed-term closed-end funds, fixed-term private business development companies, or evergreen funds with a run-off sleeve.”

Moreover, feeder fund debt can be allocated in either a vertical or horizontal manner. In vertical distributions  the investor gains vertical exposure throughout the capital stack. Conversely, in horizontal allocations, such as those seen in a collateralized loan obligation (CLO), the various tranches of feeder fund debt are distributed among different types of investors based on factors such as risk, credit rating, and return profile.

Given this, Morningstar DBRS indicated that it expects to see more horizontally distributed feeder funds in the future, which should help to further drive the convergence between fund finance and structured products.

“Together, rated feeder funds and sidecars continue expanding insurance-related assets into private markets in pursuit of yield and capital efficiency. While new players continue to enter the sidecar market, not all annuity writers participate in the space. Insurers differ in their capital needs, liability profiles, investment capabilities, and preferred forms of partnership and can pursue broader strategic relationships with asset managers instead,” the analysts added.

Renee Gao, Vice President, Global Insurance & Pension Ratings, commented: “This growth of life and annuity sidecars is fueled by the incorporation of new sidecars and expansion of existing ones, a trend that is likely to persist. Several sidecars have partnerships with private credit-focused asset managers, suggesting that there is exposure to the asset class but not revealing the amount invested.”