Bermuda Market

Last updated October 13, 2026

How the Bermuda market works

Bermuda is not a single trading floor. The market is made up of insurance and reinsurance companies that are licensed and regulated in Bermuda by the Bermuda Monetary Authority (BMA). The BMA sorts insurers into classes and uses a risk-based capital model to assess how much capital each one needs. Its commercial insurance regime has been recognized as equivalent to the EU's Solvency II standard, and Bermuda is a reciprocal jurisdiction under the NAIC framework for reinsurance.

The market took shape in the mid-1980s during a US liability insurance crisis. Large corporations, working with a broker, capitalized ACE (1985) and XL (1986) to provide high excess liability coverage that other insurers were not offering. Today Bermuda insurers and reinsurers write property catastrophe reinsurance, specialty lines such as energy, aviation and marine, casualty, life and annuity reinsurance, and management and professional liability. Many also support captive insurance structures.

Business usually reaches Bermuda carriers through brokers, often wholesale brokers, rather than directly from the insured. Because Bermuda insurers can design bespoke structures and policy forms for large clients, the market is often used for risks that standard admitted markets handle less easily, though pricing and appetite change with market conditions.

Example

Bermuda market vs. related terms

• Bermuda vs. Lloyd's. Lloyd's of London is a market in which syndicates operate under a shared framework. The Bermuda market is a group of separate companies licensed in one jurisdiction. Both are commonly accessed through brokers, and both can appear on the same program.
• The Bermuda market vs. the Bermuda Form. The market is a set of companies. The Bermuda Form is a style of excess liability wording associated with it. A policy from a Bermuda insurer does not automatically use that form.
• Insurers vs. reinsurers. Reinsurance is insurance bought by insurers. Many Bermuda companies are reinsurers, and many also write direct policies for businesses.
• Bermuda carriers vs. Bermuda captives. Bermuda is also home to many captive insurers, which are owned by the companies they insure. A captive is not the same as a commercial Bermuda insurer.
• Bermuda vs. admitted markets. A Bermuda insurer is typically not licensed in a US state, so its policies are commonly placed as surplus lines. See admitted carrier and excess and surplus lines.

A second example: Bermuda reinsurance behind an admitted policy

What to watch for

• "Bermuda" describes where a company is licensed, not a standard product. Terms, appetite, and financial strength vary by carrier.
• The "Bermuda Form" is a specific style of excess liability wording that grew out of the 1980s carriers. Not every policy from a Bermuda insurer uses it.
• Check whether the insurer is admitted or non-admitted where the insured is located, since that affects regulation and how the policy is placed.
• Bermuda is also a major reinsurance center, so a Bermuda name may sit behind a policy without being the insurer that issued it.

Questions to ask your broker or underwriter

1. Which legal entity is the insurer on the policy, and is it a Bermuda company, a US subsidiary or a fronting insurer?
2. Is the policy a follow-form excess layer that tracks the underlying wording, or its own form with different definitions and exclusions?
3. What law and dispute resolution process does the policy specify? Policies written on the Bermuda Form often use arbitration, so read the clause.
4. What is the insurer's financial strength rating, and how is it supervised?
5. How is the placement classified for the insured's home state, and what surplus lines notices come with it?
6. Which wholesale broker or intermediary is involved, and who handles claims communication?

Common mistakes

• Treating "Bermuda" as a quality label. It describes a regulatory home, not the strength of the wording or the balance sheet.
• Assuming every Bermuda policy uses the Bermuda Form.
• Skipping the dispute resolution clause. Where and how a coverage disagreement is resolved can matter as much as the coverage grant.
• Not checking the issuing entity. Brochures often use a group name that is not the legal insurer.
• Ignoring the underlying program. An excess layer is only as useful as the primary and lower layers it follows.

How the Bermuda market shows up for fast-growing companies

Larger technology, fintech and digital-asset companies that need high limits above a primary layer sometimes see Bermuda carriers in excess towers for directors and officers, cyber and professional liability. Our pages on cyber and tech E&O, digital assets and crypto and hard-to-place risks explain where capacity is commonly built. Early-stage companies usually buy primary limits first, and an umbrella or excess layer comes later as limits requirements grow. Placement often runs through a managing general agent or wholesale channel, so ask which party has authority to bind.

Related terms

Frequently asked questions