The small crowd in pastel polo shirts and sunglasses boarded the catamaran for an afternoon cruise on the Caribbean’s sapphire waters. Tucked under their drinks were napkins emblazoned with a slogan akin to a pickup line: “Let’s go beyond business small talk…”
It was a fresh boatload of US insurance executives, getting wooed to the Cayman Islands.
This is the latest front in a controversial years-long campaign by offshore reinsurers looking to drum up business and provide hundreds of billions of dollars of relief to US annuities and life insurers. While Bermuda pioneered the rush, proponents of the Cayman Islands aim to narrow the gap, touting its capital rules as even more flexible.
It’s enough that Apollo Global Management Inc., known for its operations in Bermuda, is urging US authorities to intervene.
“Reserves have moved offshore to the Cayman Islands with a fraction of the capital of the US or the Bermuda system, putting the system at risk,” Apollo Chief Executive Officer Marc Rowan told shareholders in February.
Where the US gets reinsurance — and how carefully it’s regulated — matters dearly to American savers, as it helps insurers meet their obligations when life policies and annuities come due, sometimes decades after purchase.
Reinsurers from the Cayman Islands provided about $74 billion of US insurers’ reserve credits last year, more than double the level just a half-decade ago, according to data from S&P Global Market Intelligence. And that’s despite the breakdown of a few deals for idiosyncratic reasons in 2024. Analysts tracking the market widely expect the momentum to resume.
“There is no basis for concern,” the Cayman Islands Monetary Authority said in an emailed statement. “While CIMA’s regulatory framework may be different to other jurisdictions, it fully aligns with international standards and aims to achieve the same supervisory outcomes as promulgated by” the International Association of Insurance Supervisors.
