Bermuda
Bermuda: where a 1609 shipwreck became the world's risk capital—29.3% of GDP from insurance, 60% of Florida/Texas hurricane reinsurance. By 2026: underwriting the catastrophes that test its own survival.
Bermuda exists because a ship hit a reef—and because Hurricane Andrew bankrupted American insurers. In July 1609, the Sea Venture, flagship of a fleet bound for Jamestown, ran into a hurricane off these coral islands. Admiral George Somers deliberately grounded the ship on the reefs rather than let it founder. All 150 passengers survived, spent ten months building two new vessels from Bermuda cedar, and sailed on to rescue the starving Virginia colony. A few stayed behind. Within four years, the Somers Isles Company was chartered, making Bermuda Britain's second-oldest colony after Jamestown itself.
For three centuries, Bermuda remained a minor Atlantic waystation—strategic for the Royal Navy, modest in agriculture, dependent on the sea. Its coral-limestone geology produced nothing to export. The islands' only distinction was their position: 1,000 kilometers from anywhere, floating alone in the Sargasso Sea.
Then came the catastrophes. In 1947, C.V. Starr established the first international insurer in Bermuda, attracted by tax neutrality and British legal tradition. The captive insurance wave of the 1960s brought more. But the transformation came in August 1992, when Hurricane Andrew—then the costliest natural disaster in history—generated $15.5 billion in claims and bankrupted thirteen American insurers. Within months, $4 billion in capital rushed to Bermuda to fill the void. Mid Ocean Re formed by November 1992. RenaissanceRe, PartnerRe, and a dozen others followed in 1993.
Bermuda had found its niche: the place where global capital goes when the mainland can't price catastrophe. The September 2001 attacks brought another $8.5 billion wave. Today, Bermuda's 64,000 residents manage an economy where international business—overwhelmingly insurance and reinsurance—generates 29.3% of GDP. Bermudian companies now provide approximately 60% of hurricane reinsurance for Florida and Texas. GDP reached $7.1 billion in 2024, growing 1.9% even as tourism continued its long decline from 4.8% to 3.3% of output.
By 2026, climate volatility will test whether Bermuda's role as the world's 'risk capital' can survive the risks it underwrites. The same hurricanes that created the industry now threaten its solvency calculations.