The complexity advantage
Bermuda’s ability to attract capital has not faltered. What is changing is the range of problems capital is being asked to solve.
Property catastrophe and retrofit remain fundamental to the island’s reinsurance market, but around those foundations Bermuda has built considerably greater breadth. Specialty classes have expanded, alternative and traditional capital are moving closer together and new structures are developing for risks that do not fit neatly into conventional reinsurance programmes.
For John Fletcher, recently appointed Bermuda CEO of Willis Re, that evolution is making the island more relevant to buyers, not less.
“Bermuda has always been a major hub for P&C including ILS and alternative capital, and its importance continues to grow,” he told Bermuda:Re+ILS.
“In recent years, there has been a significant build out across specialty classes, such as marine, energy and technical lines (M&ETL) and cyber, with many companies in Bermuda now able to offer capacity to core clients across multiple lines of business.”
That breadth is borne from a market where the challenge is increasingly being determined by which combination of capital, coverage and structure best addresses a particular risk.
A market built for complexity
Fletcher arrived at Willis Re as the broker itself begins a new chapter. The business is newly established, but it is not starting from scratch. Backed by WTW, it combines the opportunity to build a modern reinsurance broker without legacy constraints with infrastructure, capabilities and expertise already available across the wider group.
“Joining Willis Re at this early stage, it is fantastic to be able to help build a modern reinsurance broker from the ground up which is designed around the needs of our clients,” Fletcher said.
“We’re free from legacy constraints, which gives us the flexibility to shape our technology, structure and ways of working to achieve the best possible client outcomes.”
At the same time, Fletcher is clear that considerable work preceded his arrival. Willis Re already has advisory, analytics and servicing capabilities in place, while collaboration across WTW gives the new operation access to a much wider pool of expertise.
That combination, something new, supported by something established, also gives Fletcher an interesting vantage point from which to consider Bermuda.
One of the island’s defining characteristics, he argues, is the density of the market.
“Bermuda is a truly exceptional market where a client can see over 30 reinsurers in a few days, including some of the largest reinsurance companies in the world, who can offer meaningful amounts of reinsurance capacity.”
The significance is greater than convenience. As buyers confront increasingly complicated exposures, Bermuda puts different forms of capital, specialist underwriting expertise and decision-makers within unusually close reach.
When capital starts to overlap
Nowhere is that convergence more apparent than in the relationship between rated balance sheets and third-party capital. For years, the industry has tended to discuss traditional and alternative capital as distinct pools, each with risks and structures to which it was particularly suited. Fletcher sees those boundaries becoming less clear. “The combination of rated balance sheets and third-party capital provides significant benefit to the overall market,” he said.
“Different forms of capital are complimentary in many placements. However, there is a growing overlap. ILS offerings are becoming broader in terms of coverage and attaching slightly lower, and rated companies are also expanding their offering into areas typically associated with funds, and vice versa.”
That overlap creates competition, but also room for innovation. For brokers, Fletcher argues, the important distinction is increasingly how effectively capital can be deployed. “As brokers, it is imperative that we work closely with all forms of capital, enabling us to provide the greatest overall benefit to our clients.”
Sidecars provide one illustration of where that evolution might go next. Third-party investors have supported property sidecars for Bermuda carriers for years, but Fletcher sees increasing interest in applying the model to casualty.
The barriers are higher. Casualty requires investors to make multi-year commitments, while the longer duration creates challenges around liquidity and exit. But Fletcher expects activity to increase as those mechanisms improve. It is another example of capital pushing beyond established boundaries as the market develops structures capable of accommodating more complicated risks.
Finding protection where it is needed
The same need for flexibility is apparent in the response to secondary perils. As losses from wildfire, flood and other non-peak perils become more pronounced, cedants are looking for protection that more closely reflects the risks sitting on their balance sheets. The answer will not always come through a conventional catastrophe programme.
“Often the answer for non-peak perils can sit with aggregate and frequency covers, there are also more solutions becoming available through parametric products,” Fletcher said. “So it is important for cedants to consider all forms of capital and products as part of a robust purchasing strategy.”
The ability to understand those risks is also improving. More data is becoming available and every event provides another opportunity for reinsurers to assess how portfolios actually perform against expectations.
Sustainable capacity ultimately depends on reinsurers being comfortable with the risk they are assuming. Fletcher argues Bermuda enters that challenge from a position of strength, with company balance sheets currently “extremely healthy”.
But the broader point is that increasingly complex risk does not necessarily demand a single new source of capacity, rather the ability to combine products and capital differently.
That is where Bermuda’s breadth becomes an advantage.
Expanding what can be insured
For Fletcher, the bigger opportunity is not limited to taking a greater share of risks already transferred into the reinsurance market: “Reducing the protection gap between economic loss and insured loss is vitally important,” he said. “With increasing frequency and severity of natural disasters, too many communities around the globe are suffering from droughts, wildfires, storms and flooding without the protection of insurance to help rebuild.”
At the same time, technology will change the risks businesses need to insure. Fletcher expects advancing automation and production technologies to create new exposures even as risks arising from human interaction decline.
Being at the forefront of that shift, understanding new risks and developing ways to transfer them, will be critical to Bermuda maintaining its leadership. Technology will play a role in making that possible. Fletcher expects AI to improve underwriting, exposure management and claims handling, but sees its immediate value largely in giving people more time and better information rather than replacing them. “The reinsurance industry will always be a people business based on trust and the strength of its relationships,” he said.
That combination might ultimately capture Bermuda’s opportunity. The island has capital but, increasingly, also breadth: traditional and alternative capacity, specialist expertise, data, new products and a concentration of relationships capable of putting those pieces together.
As the risks confronting insurers become harder to model, structure and transfer, that ability to bring multiple solutions to the same problem could become more valuable still.
For Bermuda, complexity might be less a challenge to overcome than an opportunity to explore.
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John Fletcher is CEO Bermuda of Willis Re. To find out more about Willis Re, visit www.willisre.com.
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On August 18, after this interview was conducted, Willis Re announced an agreement to acquire BMS Re, US, a strategic step for the broker’s international expansion. The transaction adds a US platform with expertise in specialist lines including property-catastrophe, medical malpractice and workers’ compensation, alongside a client base spanning regional and super-regional insurers, MGAs and programme business.
Read the full Bermuda:Re+ILS Annual 2026 here.
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