Key Takeaways
- • Bermuda's life and annuity reinsurance sidecar market has quadrupled since 2021 and now holds an estimated $375 billion in assumed liabilities, according to a Morningstar DBRS report.
- • Most L&A sidecars do not publicly disclose their investment allocations, leaving brokers unable to independently examine the assets backing policies their clients hold.
- • Morningstar DBRS notes private credit exposure is likely present across many sidecars, though actual amounts are not visible from public filings.
- • Morningstar DBRS estimates the seven largest listed alternative asset managers held $1.4 trillion in insurance-related AUM in 2025, a figure Pitchbook projects will reach $2.2 trillion by 2030.
- • Regulators are responding: the NAIC adopted Actuarial Guideline 55 in August 2025, and the Bermuda Monetary Authority introduced tighter disclosure and asset-modeling rules in 2026.
Summary
Bermuda's life and annuity reinsurance sidecar market has quadrupled since 2021 and now holds an estimated $375 billion in assumed liabilities, according to a new Morningstar DBRS report. The market grew at roughly 32% per annum over the past four years. Sidecars allow insurers to cede defined blocks of mortality or longevity risk to institutional investors, who provide capital in exchange for a share of profits. Major carriers including MetLife, Global Atlantic, Prudential, Athene and Allianz have established vehicles with alternative asset managers such as KKR, Apollo, Blackstone and PIMCO.
Sponsoring insurers benefit from access to alternative asset classes such as private credit, infrastructure and mortgage loans, which can improve asset-liability matching. Bermuda's NAIC-qualified status also allows ceding insurers to obtain statutory reserve credit with reduced collateral requirements. Products most commonly ceded include fixed annuities, fixed indexed annuities, multiyear guarantee annuities, structured settlement annuities and pension risk transfers. New 2025 vehicles included Chariot Re (MetLife and General Atlantic) and Sconset Re (Allianz and PIMCO), and in 2026 Fortitude Re and Carlyle established FCA Re.
The central concern in the Morningstar DBRS report is disclosure. Most L&A sidecars do not publicly disclose investment allocations, and where data exists, asset mix varies widely, with some vehicles concentrated in corporate bonds and others exposed to asset-backed securities, mortgage loans and investment fund structures. Morningstar DBRS noted that private credit exposure is likely present across many vehicles, though amounts are not visible from public filings. When a carrier cedes in-force policies to a sidecar, the risk moves to a balance sheet backed by assets brokers cannot independently examine, even though policy terms remain unchanged.
Most sidecars still transact within their sponsor's corporate group, and third-party deals remain limited. Morningstar DBRS pointed to Metropolitan Tower Life, which after ceding pension risk transfer business to MassMutual's Martello Re in 2023 established its own vehicle, as evidence that carriers prefer in-house structures.
The growth reflects broader convergence of insurance and private markets. Morningstar DBRS estimated the seven largest publicly listed alternative asset managers held $1.4 trillion in insurance-related AUM as of 2025, and Pitchbook projects $2.2 trillion by 2030. Regulators are responding: the NAIC adopted Actuarial Guideline 55 in August 2025, requiring insurers to test the adequacy of offshore reinsurance, and the Bermuda Monetary Authority introduced tighter disclosure and asset-modeling rules in 2026. The regulatory environment, according to the report, is still catching up to the pace of growth.
Sponsoring insurers benefit from access to alternative asset classes such as private credit, infrastructure and mortgage loans, which can improve asset-liability matching. Bermuda's NAIC-qualified status also allows ceding insurers to obtain statutory reserve credit with reduced collateral requirements. Products most commonly ceded include fixed annuities, fixed indexed annuities, multiyear guarantee annuities, structured settlement annuities and pension risk transfers. New 2025 vehicles included Chariot Re (MetLife and General Atlantic) and Sconset Re (Allianz and PIMCO), and in 2026 Fortitude Re and Carlyle established FCA Re.
The central concern in the Morningstar DBRS report is disclosure. Most L&A sidecars do not publicly disclose investment allocations, and where data exists, asset mix varies widely, with some vehicles concentrated in corporate bonds and others exposed to asset-backed securities, mortgage loans and investment fund structures. Morningstar DBRS noted that private credit exposure is likely present across many vehicles, though amounts are not visible from public filings. When a carrier cedes in-force policies to a sidecar, the risk moves to a balance sheet backed by assets brokers cannot independently examine, even though policy terms remain unchanged.
Most sidecars still transact within their sponsor's corporate group, and third-party deals remain limited. Morningstar DBRS pointed to Metropolitan Tower Life, which after ceding pension risk transfer business to MassMutual's Martello Re in 2023 established its own vehicle, as evidence that carriers prefer in-house structures.
The growth reflects broader convergence of insurance and private markets. Morningstar DBRS estimated the seven largest publicly listed alternative asset managers held $1.4 trillion in insurance-related AUM as of 2025, and Pitchbook projects $2.2 trillion by 2030. Regulators are responding: the NAIC adopted Actuarial Guideline 55 in August 2025, requiring insurers to test the adequacy of offshore reinsurance, and the Bermuda Monetary Authority introduced tighter disclosure and asset-modeling rules in 2026. The regulatory environment, according to the report, is still catching up to the pace of growth.
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