Bermuda’s segregated account companies continue to increase their presence in the captive re/insurance sector, as risk owners turn to protected cell structures to address complex global exposures.
The market counted more than 2,000 active cells in 2023, an 8.6% increase year over year, according to the Bermuda Monetary Authority (BMA).
Regulators are expected to release updated guidance for segregated account companies following consultations with industry stakeholders. The framework is intended to clarify expectations for these structures as their use broadens across multiple lines of business.
The BMA’s Captive Insight Report found that segregated account companies and independent SACs now account for about 15% of all captive registrations. They generate roughly 40% of captive premiums written, underscoring the role of cell structures in Bermuda’s wider captive landscape.
Property catastrophe risks remained the primary line within SACs, with the structures writing 89% of their business as reinsurance. Market participants have continued to deploy SACs for catastrophe and high-severity risks that require ringfenced capital and tailored risk participation.
Across the broader captive sector, Bermuda captives wrote US$31 billion in gross premiums in 2023. About 71% of the underlying risk came from North America and Bermuda, reflecting the domicile’s longstanding ties with US and regional buyers.
Sixteen new captives were formed during the year, the report said. New formations were led by sponsors from construction, financial services, and technology and telecoms, with 14 structures classified as pure captives, in line with the overall market profile.
The BMA described Bermuda’s captive regime as a “mature market that has weathered industry cycles, geopolitical shifts and strategic pivots,” supported by what it characterized as strong capitalization and conservative investment portfolios. The authority said historical market resilience has been underpinned by capital management and asset allocation practices.
Short-tail property business continued to represent the largest share of captive activity. Property and casualty catastrophe cover accounted for 45% of premiums, while cyber insurance posted a 22% year-on-year increase and long-tail lines represented 35% of overall premiums, led by general liability and workers’ compensation.
The report indicated that the sector recorded another profitable year, with captives posting an average combined ratio of 79%. Balance sheets remained heavily weighted toward liquid or high-quality holdings, with quoted investments, intercompany advances, and cash representing 71% of total assets, and about 85% of bond portfolios rated “A” or higher.
The captive results sit within a broader commercial market that has continued to grow premiums and capital, according to recent BMA and Association of Bermuda Insurers and Reinsurers data.
Member companies reported a 10% year-over-year increase in 2024 gross written premium to more than US$188 billion, with total equity rising to US$178 billion, while the BMA’s 2025 stress testing of long-term reinsurers found that most entities maintained capital levels well above regulatory thresholds.
The authority has also pointed to the scale of Bermuda’s role in paying global losses, noting that commercial insurers and reinsurers on the island incurred US$1.1 trillion in gross claims costs to policyholders and cedants worldwide between 2016 and 2024.
Market participants say that track record in settling catastrophe and specialty claims complements the captive market’s use of Bermuda as a platform for capital, risk transfer and program support.
The BMA also pointed to emerging trends, including a new supervisory policy allowing captives to incorporate stablecoins on a case-by-case basis. The BMA said the market is “increasingly leveraging artificial intelligence to enhance operational efficiency, risk management and strategic decision-making,” while cautioning that the technology introduces new oversight challenges.
