We review the history of life insurance in Bermuda, reflect on how we have gotten to where we are today, and look forward to what may be ahead. We present a hypothetical—yet realistic—case study to illustrate some of the factors that can lead to a strategic decision do business Bermuda. From an embedded-value perspective, we highlight potentially considerable benefits from a move from a U.S. statutory basis to a Bermudian economic balance sheet.
Author(s): Tony Dardis, William C. Hines, and Su Meng Lee
Martello Re Limited (“Martello Re”), a licensed Class E Bermuda-based life and annuity reinsurance company with initial equity of $1.65 billion, has been launched with the financial support of Massachusetts Mutual Life Insurance Company (“MassMutual”), Centerbridge Partners, Brown Brothers Harriman, and a pre-eminent group of institutional investors and family offices, including Hudson Structured Capital Management Ltd. (doing its re/insurance business as HSCM Bermuda). Barings and Centerbridge will act as asset managers for Martello Re.
Through a commitment to long-term financial strength, creative solutions, and unique investment capabilities, Martello Re plans to offer a differentiated value proposition to its counterparties. The company will initially focus on providing MassMutual and its subsidiaries with reinsurance capacity on current product offerings, after which it will offer its services selectively to other top insurers in the life and annuity space.
MassMutual and its subsidiaries will initially reinsure approximately $14 billion of general account liabilities to Martello Re and also enter into a flow arrangement to reinsure new business. Both transactions are expected to close in February 2022 and have received regulatory approval.