U.S. life insurers have shifted more of their general account risk to entities abroad than in the U.S. as of year-end, the first time that offshore reinsurance hubs have overtaken domestic ones for that business.
Deals to cut the risk of U.S. life insurers' general accounts with offshore entities represented $1.06 trillion in reserves in 2025, accounting for nearly 52% of the industry's total use of reinsurance, according to an S&P Global Market Intelligence report published Friday.
When factoring in separate accounts, where insurers park more-sophisticated products such as variable annuities, the total use of offshore reinsurance stood at 47.9%.
Reinsurance, often referred to as insurance for insurers, allows firms to shift part of the risk on their books to another company, freeing up capital that can then be allocated for growth.
The use of offshore relief has ramped up in recent years, prompting concerns among critics that those jurisdictions' looser regulations create risk in the life insurance sector, which provides financial security to many retired Americans through annuities.
Chief among those hubs abroad is Bermuda. Last year, the island represented 40.5% of the total reinsurance capacity used by U.S. life insurers, compared to 38.3% in 2024, even as authorities increased disclosure requirements for local firms.
Reinsurance deals with entities in the Cayman Islands have also continued growing, reaching $85.6 billion in reserves last year, compared to $65.5 billion the year prior. Still, the territory represents 2.8% of all U.S. life firms' use of reinsurance.
