Bermuda life sidecar market quadruples to estimated $375 billion, Morningstar DBRS finds

Bermuda’s life and annuity reinsurance sidecar market has quadrupled in four years to an estimated $375 billion of assumed liabilities, according to a Morningstar DBRS report cited by The Royal Gazette on 3 September. The Gazette said Morningstar put the market’s expansion at an annual rate of about 32 per cent since 2021. Morningstar DBRS’s own commentary, dated 10 August, says the market has quadrupled since 2021 as insurers scale up and expand beyond legacy blocks.

Morningstar DBRS described Bermuda as "by far the largest" market for the structures, the Gazette reported. Sidecars allow insurers to share insurance risks with institutional investors: a vehicle can reinsure an existing group of policies or take an agreed share of new business, with investors providing capital to support the liabilities in return for a share of the profits. The Gazette reported that US insurers can receive statutory credit for business ceded to Bermuda reinsurers, often with reduced collateral requirements.

According to the Gazette’s account of the report, the vehicles have so far concentrated largely on annuity-type products: fixed and fixed-indexed annuities, multiyear guarantee annuities, structured settlements and pension risk transfers. Established sidecars include Athene and Apollo’s ACRA vehicles, Global Atlantic and KKR’s Ivy Re sidecars, and Prismic Re, which involves Prudential, PGIM and Warburg Pincus. New Bermuda sidecars established in 2025 included FCA Re, Ivy Re III and Chariot Re. Chariot Re announced the completion of a $700 million capital raise, the Gazette said.