Bermuda re/insurers continue to support US policyholders amid cat losses: BMA

Bermuda-based re/insurers are expected to face gross claim losses nearing US$10 billion in payments to policyholders and cedants in the United States following the catastrophic January 2025 wildfires in Southern California.

These fires, which have become the most costly wildfire disaster in US history, were intensified by hurricane-force winds and worsened by drought conditions. Vast areas of land were scorched, resulting in significant property damage and tragic loss of life.

According to market claims data collected by the Bermuda Monetary Authority (BMA) in March 2025, the fatalities and extensive property damage from the Eaton Fire in Altadena and the Palisades Fire in Pacific Palisades have ranked them among the most financially devastating fires in US history.

These two fires are now considered the most expensive in terms of both human loss and property damage.

The loss estimate, based on BMA’s claims data, suggests that the economic losses from the California wildfires could range from US$250 billion to US$275 billion, with industry-insured losses estimated at no less than US$30 billion. Given these projections, Bermuda re/insurers are expected to bear up to 30% of the total insured losses.

This includes a broad spectrum of financial impacts such as property damage, evacuation costs, business interruption, and additional living expenses.

The estimate also covers reconstruction costs, including cleanup, permit fees, necessary building code improvements, and potential law and ordinance expenses. All of this information was gathered by the BMA, underscoring the extensive financial consequences of the disaster.

Craig Swan, Chief Executive Officer of the BMA, commented: “The survey results demonstrate Bermuda’s crucial role in supplying risk capacity to the US and other regions prone to catastrophes. The ability of US insurers to cede risk to Bermuda enables diversification of risk globally and helps stabilise insurance costs for customers residing in catastrophe danger zones.

“Nevertheless, the significant disparity between the economic and insured losses remains a societal concern, underscoring the need for stronger public-private partnerships and increased collaboration among regulators, insurers and other stakeholders to address the protection gap.”

Bermuda’s re/insurance sector has become a significant player in covering insured losses from major weather events in the US, often shouldering a sizeable portion of the financial burden during catastrophic incidents.

For example, Bermuda re/insurers are estimated to have covered around 30% (US$31 billion) of the insured losses from Hurricanes Harvey, Irma, and Maria during the 2017 hurricane season. In 2021, they contributed 30% (US$6 billion) of the losses from Hurricane Ida and 20% (US$3 billion) of the damage caused by the Texas Winter Storm Uri.

In 2022, following Hurricane Ian, Bermuda insurers were responsible for 25% (US$13 billion) of the insured losses. More recently, in 2024, they took on 20% (US$2 billion) of the losses from Hurricane Helene and 15% (US$4 billion) from Hurricane Milton.

While Bermuda insurers are a major source of reinsurance capital for the US, their involvement in covering a significant share of insured losses in these events highlights the substantial financial strain placed on the industry by these recurring catastrophes.

Gerald Gakundi, Deputy Managing Director, Supervision (Insurance), said: “The difficult task of rebuilding after destruction at the scale of the California Wildfires continues despite numerous obstacles. During such challenging times, which have devastated lives and destroyed communities, the ability of Bermuda re/insurers to respond quickly in settling claims supports the essential rebuilding efforts.”

This data is derived from the BMA’s US Data Claims Survey, conducted in March 2025. It encompasses both direct insurance and reinsurance, with responses received from 119 re/insurance companies. “The Authority is grateful to the companies who participated in the survey,” Gakundi added.

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Bermuda-based re/insurers are expected to face gross claim losses nearing US$10 billion in payments to policyholders and cedants in the United States following the catastrophic January 2025 wildfires in Southern California. These fires, which have become the most costly wildfire disaster in US history, were intensified by hurricane-force winds and worsened by drought conditions. Vast…