Capital is capacity: Bermuda’s model offers blueprint for next phase of risk transfer

The global re/insurance market is entering a new phase where the availability and deployment of capital will determine its ability to meet rising demand for protection, according to Andy Mais (pictured), former president of the NAIC, former vice chair of the International Association of Insurance Supervisors (IAIS), and senior advisor at Deloitte.

Speaking at the  ABIR Risk Forum 2026, which took place in Bermuda this week, Mais framed the challenge in simple terms: “Capital is capacity.”

“We cannot adequately address the needs of consumers without sufficient capital to provide the necessary capacity for coverage. That’s the bottom line,” he said, adding that innovation, which is also properly regulated, will be critical in ensuring that capital can flow efficiently across borders to meet evolving risks.

His remarks come at a time when the industry is grappling with expanding exposure to complex and often difficult-to-model risks, while also facing pressure to close the global protection gap. Mais argued that while the challenges are well understood, the solution remains consistent: attracting and deploying capital at scale.

Drawing on his experience as a regulator, he highlighted that closing the protection gap has long been a central objective for policymakers and market participants alike. However, without sufficient capital, efforts to expand coverage will fall short.

That dynamic has been a defining feature of Bermuda’s development as a global reinsurance hub. Mais pointed to the island’s history of responding to market dislocation with rapid capital formation, most notably in the aftermath of Hurricane Andrew in 1992.

The storm, which caused widespread devastation and led to multiple insurer failures in the US, exposed a significant shortfall in industry capacity. In response, a wave of new reinsurers was established in Bermuda, bringing fresh capital and a more sophisticated approach to catastrophe risk modelling.

That moment, Mais suggested, created a blueprint for how the market can respond to large-scale shocks. “It is that sudden influx of capital and expertise that became the foundation of an industry in which Bermuda is a world leader,” he said.

Subsequent events reinforced that model. Following the 9/11 attacks and later hurricane seasons, further capital entered the market, strengthening Bermuda’s position as a centre for catastrophe risk transfer. The island’s ability to attract capital quickly and deploy it efficiently has remained a core differentiator.

Importantly, Bermuda has also demonstrated its capacity to evolve beyond property catastrophe. Mais highlighted the shift that followed the 2008 financial crisis, when pressures on US life insurers led to the growth of asset-intensive reinsurance.

Bermuda emerged as a key destination for this business, supported by a regulatory framework that adapted alongside market expansion. As the sector scaled, the Bermuda Monetary Authority introduced enhanced scrutiny, including greater disclosure requirements and oversight of liquidity and asset-liability management.

That regulatory responsiveness has been critical in maintaining confidence in the market.

Bermuda now holds both Solvency II equivalence and reciprocal jurisdiction status with the US, positioning it as a flexible hub for cross-border insurance and reinsurance activity.

Today, the island accounts for a significant share of global reinsurance capital and continues to attract new investment.

For Mais, the question is whether Bermuda can replicate this model in addressing the next generation of risks.

While property catastrophe remains a cornerstone of the market, Bermuda has already expanded into a broader range of specialty lines, including cyber, mortgage and terrorism. These areas are expected to play an increasingly important role as risk profiles evolve.

“We didn’t need to worry about cyber risk, we didn’t need to worry about AI risk” in the past, Mais noted, but these exposures are now becoming central to the industry’s future.

The challenge, he suggested, is to ensure that capital continues to flow into these areas in a way that supports sustainable growth. This will require not only innovation in product design, but also alignment between regulators and market participants.

The Association of Bermuda Insurers and Reinsurers (ABIR) represents Bermuda’s major property and casualty insurers and reinsurers. The event was supported by ABIR member companies and event partners KBRA, Bermuda Business Development Agency (BDA), and Deloitte, along with education partner The Institutes Knowledge Group.

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