Bermuda-based reinsurers expanded their presence in the American health reinsurance market in 2024, according to a recent report from AM Best.
Hannover Life Reassurance Bermuda Ltd was ranked second among unaffiliated health reinsurers in the United States, writing US$14.5 billion in premium for the year. The company was involved in major deals, including a US$2.76 billion quota share agreement with Blue Cross Blue Shield of Michigan, followed by an additional US$1.65 billion tranche with the same insurer.
Hannover Re Bermuda also entered into a US$3.1 billion agreement with Horizon Healthcare Services of New Jersey.
Other notable Bermuda-linked transactions included Lincoln National’s US$4.94 billion affiliated deal through Lincoln Pinehurst Re and Aetna Life Insurance Company’s US$4.5 billion ceded to Hannover Re Bermuda. Sun Life Assurance transferred over US$2.2 billion in stop-loss premiums to its affiliate, Sun Life Financial (Bermuda) Reinsurance Ltd, based in Hamilton.
Member companies of the Association of Bermuda Insurers and Reinsurers (ABIR) reported a 10% year-over-year increase in premium written for 2024, with gross written premium exceeding US$188 billion and total equity rising to US$178 billion.
Bermuda-based reinsurers also grew capital by 16% in 2024, outpacing their peers in Europe, the United States, and Asia. These companies now represent about 15% of global reinsurance capital, reflecting their expanding influence in the sector.
The AM Best report also noted Bermuda’s continued importance in the captive insurance sector. CVS Caremark Indemnity Ltd, a captive domiciled in Bermuda, received US$407 million in ceded premium during 2024.
Total health reinsurance premiums in the United States grew by 30% last year, reaching US$66 billion. The increase was attributed to higher demand for coverage of high-cost claims and stop-loss insurance.
AM Best pointed to aging populations and rising healthcare needs as factors contributing to the global growth of health reinsurance. In the US, greater claim costs and more high-dollar claims have led insurers to rely more heavily on reinsurance.
By the end of 2024, US life insurers had transferred more than US$1 trillion in liabilities to offshore reinsurers, primarily in Bermuda.
“The US health reinsurance market has grown in terms of quota share and excess of loss reinsurance arrangements,” said Jon Housel, an analyst at AM Best. He added that the volume of ceded health premium has increased by more than 350% over the past decade.
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