Bermuda and the ILS market: positioned for growth in 2025
The island continues to anchor the evolution of a maturing market attuned to a shifting risk landscape, says ILS Bermuda chair Jo Stanton.
The insurance-linked securities (ILS) market continues to demonstrate its strategic value in an increasingly complex global risk environment. As we see increased volatility in capital markets, ILS’s low correlation and stable performance, along with attractive risk-return profiles, ensures the asset class is becoming an ever-more important strategic allocation for institutional capital. Bermuda, as a leading domicile, continues to anchor the industry's evolution and growth, defining what’s next for the industry.
Capital inflows remain strong, with the ILS market surpassing $107 billion in capacity at the close of 2024. Catastrophe bond issuance set a new benchmark at $17.7 billion, while interest in non-catastrophe risks, such as cyber, terrorism and casualty, grew steadily. Issuance was $7.1 billion in the first quarter of 2025, the largest first quarter issuance on record. This broadening of size and scope reflects a maturing market attuned to the shifting risk landscape and investor appetite for diversified exposures.
“As risk grows more complex and the need for capital more urgent, Bermuda remains the market’s most trusted launchpad, setting the pace for what’s possible in 2025 and beyond.”
Bermuda’s infrastructure continues to support innovation and growth. The Bermuda Stock Exchange (BSX) reported the number of cat bond programme structures listed increased to 114 over the course of 2024, representing roughly 92% of global outstanding cat bond issuance, underlining the jurisdiction’s enduring relevance. Much of this issuance is tied to climate-related natural perils, reinforcing the island’s role in mobilising capital to address the increasing frequency and severity of weather-related events.
Innovation across underwriting, risk modelling and transaction execution is also contributing to the sector’s momentum. InsurTech collaborations are redefining efficiency, transparency and speed across the ILS lifecycle. Technologies such as artificial intelligence, blockchain and distributed ledger systems are enabling more efficient operations and informed risk selection. Bermuda’s openness to digital transformation has positioned it as a hub both for capital and technological advancement in risk transfer.
On the regulatory front, Bermuda is leading with vision. Regulatory developments continue to underpin investor confidence. The Bermuda Monetary Authority (BMA) remains engaged and proactive, refining the ILS framework to improve efficiency while upholding strong oversight standards. These efforts have streamlined the path for new issuances and ILS vehicle launches and have enhanced transparency across the market.
Climate change remains a central consideration for natural perils and weather-related catastrophes. As extreme weather events become more common, ILS plays a critical role in financing recovery and enhancing resilience in vulnerable and high-risk regions. Bermuda’s strategic focus on climate-linked strategies ensures it remains aligned with global priorities around adaptation and recovery. From sovereign risk pools to parametric products designed for vulnerable regions, ILS plays a pivotal role in natural disaster risk recovery.
Investment in local talent remains an important priority. Through the ILS Bermuda and Bermuda College collaboration, educational programmes continue to provide students with industry exposure and career pathways, helping build a future-ready workforce.
Looking ahead, the 12th annual Bermuda Convergence event, scheduled for October 13-15, 2025, will offer a forum for stakeholders to explore current trends and future directions in the ILS space. With sessions focused on scientific research, climate resilience, industry tech innovation and regulatory developments, the event will reflect the industry’s continued progress and potential.
With strong fundamentals, forward-looking regulation and a focus on innovation and responsiveness, Bermuda is well positioned to lead the ILS market into its next chapter of responsible growth. As risk grows more complex and the need for capital more urgent, Bermuda remains the market’s most trusted launchpad, setting the pace for what’s possible in 2025 and beyond.
Jo Stanton is chair of ILS Bermuda and head of finance at Tangency Capital. To find out more about ILS Bermuda, visit ilsbermuda.com
For more news on Bermuda Risk Review 2025, click here.
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