Built on Governance, Driven by Innovation: The Bermuda Advantage
Holding 85% of the cat bond market, Bermuda’s edge in alternative capital is no accident.
“Reinsurance is global, but it doesn’t work without Bermuda.” For Brad Adderley, managing partner for Bermuda at law firm Appleby, there’s no ambiguity.
He has watched the island’s growth from the front row since 1996 and is resolute that Bermuda continues to dominate reinsurance with its innovation and sound infrastructure. Leading the way from niche captives in the 1970s to cat bonds and ILS in 2025, Bermuda’s evolution has indeed been relentless, and some would say that today it’s not just keeping up with the market; it’s setting the standard.
Although investors have grown more demanding and regulators are tightening their grip, the island’s sophisticated ecosystem has helped it become a global leader in both volume and depth of infrastructure. “Built on governance, driven by innovation – that’s the Bermuda advantage,” Adderley highlighted.
“It’s a marketplace,” Adderley emphasised. “There are so many brokers and reinsurers on-island; we can do deals with each other. Almost every major player in the world has operations in Bermuda.”
That density of expertise, capital and innovation makes the island unique. “Without Bermuda, the reinsurance market would be in serious trouble. Singapore is not a marketplace. Cayman is not a marketplace. Bermuda is.” he stated.
Nowhere is this more evident than in the cat bond market. Thanks to the growth of special purpose insurers (SPIs), Bermuda has seized dominance. “We’ve probably got 85% of the cat bond market, if not higher,” Adderley observed. “On the ILS side, we’ve got transformers, property and casualty sidecars and cat bonds.”
“Almost every major player in the world has operations in Bermuda.”
Appleby itself plays a central role, as Adderley explained. “We give birth, in that we help raise capital, structure documents, obtain BMA approvals and insurance licence, set up the office, all the way through to preparing companies ready to write business.”
As easy as breathing air
As global regulatory regimes sharpen and mature, Bermuda has remained at the forefront, thanks in part to the Bermuda Monetary Authority (BMA). “We are NAIC-approved, a reciprocal jurisdiction, Solvency II-equivalent,” Adderley noted. “The BMA is constantly making sure we stay at the forefront, and we remain here because of our reputation.”
That reputation is increasingly tied to transparency and ESG (environment, social and governance) alignment. “The BMA has been tackling ESG, compliance and transparency because we want to conform to international standards,” Adderley said. “We don’t want to ruin our reputation, and clients now want to be regulated. Otherwise, policyholders and investors just won’t do business with you.”
At Appleby, these expectations are part of the daily workflow. “Every policy we draft for review by the BMA covers transparency and compliance and ESG. It’s just like breathing air now.”
Yet Adderley is not complacent. He’s troubled by competing jurisdictions that lower the bar. “Some still attract companies with the idea of ‘less is more’: less capital, less governance and less staffing. That really concerns me, because how will that affect other offshore jurisdictions that are doing it correctly?”
But as competitors cut corners, Bermuda is doubling down on governance, capital and innovation, though Adderley noted that the make-up of Bermuda’s client base was shifting, particularly in the ILS space.
“The cat bond market is off the chart, and not just in North America any more. We’re seeing more from Europe and Asia, which can only be good for Bermuda.”
Terms, tech and talent
ILS platform providers are also thriving in Bermuda, enabling smaller and more frequent private cat bonds. “That means more sponsors, more investors and more deals. These platforms are providing more solutions, which means they have new clients.”
Even the types of risks and currencies are evolving. “There are tech companies writing new risks or using bitcoin or stablecoins. There are innovative products using tech to write all risks, old and new. We’re now dealing with tech people doing insurance and insurance people using tech.”
As Adderley looks toward Monte Carlo’s September gathering, several questions are at the top of his mind, predominantly concerning terms, pricing and whether a hurricane would occur before the event.
“Also, will there be another commercial reinsurer, and will they succeed?” he added. “Every year, we read about the same three or four. Out of those, only one, maybe two, ever makes it.”
For Adderley, ILS will always be a topic of discussion. “It’s become much more common,” he observed. In fact, ILS is now so routine for many firms, “a lot of private cat bonds don’t even use lawyers any more”.
But Monte Carlo is also about serendipity. “I was sitting outside the Buddha Bar when I had the very first conversation about doing a private cat bond,” he recalled. “That kind of experience can’t be replicated on Zoom. You never know which crazy idea might grow into something bigger and better.”
In the next one to two years, Bermuda’s largest challenges, Adderley believes, won’t have changed. “It’s always about talent; finding people with the right attitude, who care, and who want to move to Bermuda.” Adderley said. “And with AI, if once you needed 10 people before, maybe now you only need six, so what does that mean for staffing expectations and for the economy?”
Whatever the answer, Adderley is confident Bermuda is ready to adapt. “We’re all going to have to learn from each other,” he said. “But if there’s one place that’s proven it can evolve and lead, it’s Bermuda.”
First Published in Bermuda:Re+ILS, September 2025
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