Collateralized insurer uptake lifts Bermuda cat bond, ILS registrations in 2025

Registration of new collateralized insurer class of companies in Bermuda soared to its highest level ever in 2025, helping lift catastrophe bond and insurance-linked security (ILS) related registrations above the prior year, while new cat bond issuance structures also rose compared to 2024.

The latest data available from the Bermuda Monetary Authority (BMA) shows that registrations of new company structures for use in insurance-linked securities arrangements, as well as other alternative or third-party reinsurance capital related use-cases, remained very strong in 2025.

The catastrophe bond remains the single biggest driver of new ILS related company registrations in Bermuda, the regulator’s data reveals.

In full-year 2025, the number of special purpose insurers (SPIs) registered by the Bermuda Monetary Authority (BMA) reached 25, an increase of 4 over the 21 SPI’s registered in 2021.

23 restricted SPI’s were registered for catastrophe bond issuances in 2025, while the other two were unrestricted SPI, which are more commonly used as a multi-transaction and counterparty collateralized reinsurance structure.

For comparison, 2024 saw 19 restricted SPI’s registered and 2 unrestricted SPI vehicles.

Catastrophe bond SPI’s tend to be used as program structures, so they can be used multiple times over a number of years for issuing different series of cat bonds.

As a result, the continued strong flow of new cat bond issuers is positive for a continuation of active issuance levels for catastrophe bonds coming out of Bermuda.

As well as the activity in SPI’s for cat bonds and other ILS transactions, during full-year 2025 Bermuda also saw use of its collateralized insurer class company accelerating meaningfully.

There were 10 collateralized insurers registered in Bermuda in 2025, according to the BMA data. That is the highest number ever seen in a single year.

It reflects the growing use of these structures as a multi-counterparty vehicle for transacting in collateralized reinsurance and retrocession arrangements, with the collateralized insurer gaining adoption among ILS funds and others deploying third-party investor capital backed reinsurance capacity.

Bermuda’s regulator, the Bermuda Monetary Authority (BMA), developed and launched the collateralized insurance and reinsurance class of Limited Purpose Insurer (LPI) back in 1999 in response to the increasing sophistication and scope of the insurance-linked securities (ILS) market.

It offers a structure that can be used for multi-counterparty and transactional purposes, underwriting collateralized reinsurance, retrocession and other forms of ILS transaction, while dealing with numerous sources of capital, given the ability to segregate cells or transactions from each other.

One additional and definitely ILS related registration in 2025 came in the intermediary category, the establishment of Hannover Re Capital Partners Limited and its registration as an agent, which is the new ILS focused Bermuda platform of the global reinsurance firm Hannover Re.

As a result, the total number of newly registered entities in Bermuda in 2025 that are definitely identifiable as catastrophe bond or ILS related was 36, which is higher than 2024’s 28 entities and above the long-term average of 30.

It’s also the fourth highest number registered since 2010, as Bermuda’s marketplace benefited from surging cat bond issuance and interest in ILS investments.

It is especially impressive when you take into account the fact many of the cat bond and ILS structures registered in Bermuda over the years are able to be used multiple times.

Numerous of the new registrations seen in 2025 are from first-time cat bond sponsors, or new firms establishing their first ILS vehicle or transformer, which reflects the buoyant marketplace in Bermuda.

In the registration statistics for 2025 there is also evidence of structures being established for life and annuity sidecars, another third-party capitalised reinsurance vehicle.

The latest data from the Bermuda Monetary Authority (BMA) shows that the island maintains its position as the leading domicile for insurance-linked securities (ILS) of all kinds, as well as for the expanding use of third-party capital within structures that directly source reinsurance-linked returns for investors.

Bermuda is also home to the vast majority of catastrophe bond issuance through listings on the Bermuda Stock Exchange (BSX), as we recently reported.

You can read about and view details of many of the Bermuda registered SPI’s and other ILS structures in our catastrophe bond Deal Directory and our reinsurance sidecar transaction listing.