Offshore reinsurance remained a central focus for US life insurers in the third quarter, as companies continued to leverage these structures to enhance capital efficiency and financial flexibility, according to Moody’s.
Alongside this trend, life insurers reported increased profitability and sales growth, supported by a favorable macroeconomic environment. Investment income rose 4% from the previous quarter, while assumption updates had a net neutral effect on earnings.
During the quarter, F&G Annuities and Life, Inc. announced a partnership with a Blackstone-backed reinsurance vehicle, with about US$1 billion in committed capital. The reinsurer will provide flow quota share reinsurance for F&G’s fixed indexed annuity sales. Moody’s noted that large asset managers are playing a growing role in offshore reinsurance transactions.
The growing reliance on offshore reinsurance is reflected in the increasing volume of reserves transferred abroad, particularly to Bermuda. ALIRT Research reported that by the end of 2024, US life insurers had ceded 38% of their total US$2.4 trillion in reserves to Bermuda-based reinsurers, up from 26% in 2020.
Bermuda now accounts for 84% of all US life and annuity reserves ceded to non-US jurisdictions, underscoring its dominance as the preferred offshore destination for the sector.
Bermuda’s appeal is further highlighted by the influx of capital into its reinsurance sector. Since 2016, more than US$50 billion in new capital has flowed into Bermuda’s life insurance reinsurance market, which now represents roughly 35% of global reinsurance capacity by the end of 2024.
The establishment of FCA Re, a Bermuda-based reinsurer formed by Fortitude Re and Carlyle, marked another significant development in the quarter. AllianceBernstein, as a lead investor, will manage approximately US$1.5 billion in private credit assets for FCA Re, which holds more than US$700 million in capital and is focused on reinsuring Asian liabilities.
The scale of offshore reinsurance activity continues to grow industry-wide. US life insurers have now transferred over US$1 trillion in liabilities to offshore reinsurers, with more than US$130 billion shifted in 2023 alone.
While Bermuda leads, other jurisdictions such as the Cayman Islands and Barbados have also seen increased activity as insurers seek to manage long-term risks tied to retirement savings and annuity products.
In the quarter, MetLife also launched Chariot Re, a Bermuda reinsurance company in partnership with General Atlantic, transferring roughly US$10 billion of liabilities to the new entity during the quarter.
CNO Financial’s wholly owned reinsurance company completed its second transaction, reinsuring US$1.8 billion of in-force supplemental health statutory reserves and 50% of new supplemental health business as of October 1, 2025, Moody’s reported.
Moody’s expects the momentum in offshore reinsurance deals to persist through the end of the year and into 2026. Life insurers are using offshore platforms, particularly in Bermuda, to achieve diversification, capital efficiency, and improved return on equity.
This trend allows insurers to support the same liabilities with less capital, which Moody’s views as a credit negative for the sector.
In addition to reinsurance activity, partnerships between life insurers and alternative asset managers continued to drive growth in private credit. Aquarian Capital’s affiliate announced the acquisition of Brighthouse Financial for US$4.1 billion in an all-cash transaction, expected to close in 2026.
The Pension Risk Transfer market is also expected to become more active, with MetLife having written US$12 billion in PRT transactions in the fourth quarter of 2025. Long term care blocks experienced some variability in assumption updates, with Unum recording a US$478.5 million pretax reserve increase after removing morbidity and mortality improvement assumptions.
