Bermuda maintains its position as the leading center for insurance-linked securities (ILS), solidifying its status as the global leader in alternative risk transfer as the market grows beyond traditional catastrophe bonds. The territory’s well-established regulatory environment, mature capital markets, and specialized service providers continue to enable a broad array of ILS structures, including catastrophe bonds, special purpose insurers (SPIs), collateralized reinsurance vehicles, and sidecars.
The ILS Bermuda association, which groups top professionals in the field, emphasized the jurisdiction’s efficiency in processing new registrations. In 2025, Bermuda approved 25 new SPIs and 10 new collateralized insurers, while activity in early 2026 remained robust, with seven new SPIs and two new collateralized insurers cleared in the first quarter. The Bermuda Monetary Authority now handles SPI approvals for catastrophe bond transactions in as few as three days, expediting time-sensitive issuances.
The Bermuda Stock Exchange (BSX) leads the global ILS market, capturing 95.4% of the outstanding 144A and private catastrophe bond market by value. Through the first three quarters of 2026, the exchange listed 169 new catastrophe bond notes and ILS structures, reinforcing its dominance in listed ILS issuance. This leadership stems from Bermuda’s ability to attract issuers seeking liquidity alongside clear regulatory standards.
The ILS market is broadening beyond traditional catastrophe risks into emerging threats such as wildfire damage, European flooding, convective storms, cyber incidents, casualty losses, and sovereign disaster relief programs. This shift demonstrates rising investor trust in alternative risk transfer methods, including parametric triggers and AI-based risk assessment tools. According to ILS Bermuda, the next phase of market development will prioritize careful underwriting standards, transparent deal structures, and stronger secondary-market trading to close global protection gaps.
Investors now treat ILS as a hedge against broader financial market volatility, while corporate sponsors integrate it as a supplement to traditional reinsurance. The Convergence 2026 conference, entering its 14th edition, gathered industry executives, regulators, and innovators to examine these developments. The gathering highlighted Bermuda’s dedication to advancing the ILS sector as it adapts to new demands.
