Fit to compete: Securing the future of life insurance

The life insurance market is facing a tough landscape. Market demand continues to soar. At the same time, the traditional business model is buckling under the strain of low yields, mounting capital demands and intensifying price competition.

However, these challenges are opening up valuable opportunities for Bermudian companies. This includes helping annuity writers to improve capital efficiency and opening up access to broader investment strategies.

This paper looks at how Bermuda can play a key role in putting the industry back on a competitive and profitable footing.

Bermuda is ideally placed to provide the cost-, capital- and tax-efficient solutions that would enable annuity writers to compete more effectively. Ceding risks to special purpose insurers and other reinsurance structures domiciled in Bermuda has become a growing trend over the last four years.

In this paper, we also examine how Bermuda offers the additional advantage of more flexible asset rules and a tax neutral environment, which can help companies to deliver higher investment returns to their policyholders.