Commercial Insurance Design and Formation

Design and formation

BUILT FOR Life and Non-Life insurance companies in Bermuda

The Bermuda Monetary Authority (BMA) is responsible for regulating and supervising the insurance industry, overseeing the establishment and operation of different types of insurance companies. The BMA provides a variety of licenses designed for various types of insurers, each with its own set of regulatory criteria and responsibilities. IML possesses significant expertise in structuring and managing the different commercial insurance company formations and licenses offered by the BMA. These encompass non-life insurance, Class 3A, Class 3B, and Class 4, as well as life insurance, Class C, Class D, and Class E.

IML specializes in the design and formation of both Life and Non-Life insurance companies in Bermuda.


Feasibility Study

IML will guide you through the feasibility process, put you in contact with industry experts and provide expertise with the assessment of Regulatory Requirements, Financial Projections, Capitalization & Funding and Risk Management. 

A feasibility study is a crucial initial step in determining the viability and potential success of establishing an insurance company. It involves a comprehensive assessment of various factors, including market analysis, regulatory requirements, financial projections, and operational considerations. Below is an outline of key components to consider when conducting a feasibility study for setting up an insurance company:

Feasibility Study

Market Analysis

  • Market Size and Growth: Evaluate the size and growth trends of the insurance market, including segments such as life, health, property, casualty, and specialty lines.
  • Competitive Landscape: Analyse existing competitors, their market share, product offerings, distribution channels, and pricing strategies.
  • Market Needs and Opportunities: Identify unmet needs, underserved segments, and emerging trends in the insurance market that present opportunities for a new entrant.

Feasibility Study

Regulatory Requirements

  • Licensing and Compliance: Research the regulatory framework governing insurance companies in your target jurisdiction(s). Determine the licensing requirements, capitalization standards, and ongoing compliance obligations.

  • Legal Structure: Evaluate the legal structure options for the insurance company, such as a corporation, mutual company, or captive insurer, based on regulatory considerations and strategic objectives.

Feasibility Study

Product Development

  • Product Portfolio: Define the types of insurance products and coverage options to offer, considering market demand, competitive positioning, and regulatory compliance.

  • Underwriting Guidelines: Develop underwriting guidelines and risk acceptance criteria to ensure sound risk management practices and profitability.

Feasibility Study

Financial Projections

  • Revenue Projections: Estimate revenue streams from insurance premiums, investment income, and other sources.

  • Expense Projections: Forecast operating expenses, including underwriting costs, administrative expenses, and claims management costs.

  • Profitability Analysis: Conduct sensitivity analysis and scenario planning to assess the potential profitability of the insurance company under various market conditions.

Feasibility Study

Capitalization and Funding

  • Capital Requirements: Determine the initial capitalization requirements based on regulatory standards, business objectives, and risk appetite.

  • Sources of Funding: Identify potential sources of funding, including equity investment, debt financing, and reinsurance arrangements.

Feasibility Study

Operational Considerations:

  • Distribution Channels: Define distribution channels for selling insurance products, such as agents, brokers, online platforms, and strategic partnerships.

  • Technology Infrastructure: Assess the technology infrastructure needed to support underwriting, policy administration, claims processing, and customer service operations.

  • Human Resources: Determine staffing needs, hiring requirements, and talent acquisition strategies to build a skilled and experienced team.

Feasibility Study

Risk Management

  • Risk Assessment: Conduct a comprehensive risk assessment to identify and mitigate potential risks, including underwriting risks, investment risks, regulatory risks, and operational risks.

  • Reinsurance Strategy: Develop a reinsurance strategy to manage risk exposure and enhance the company’s capacity to underwrite insurance policies.

Feasibility Study

Marketing and Branding

  • Brand Identity: Define the brand identity, positioning, and value proposition of the insurance company to differentiate it from competitors and attract customers.

  • Marketing Plan: Develop a marketing plan outlining promotional strategies, advertising campaigns, and customer acquisition initiatives.

Feasibility Study

Exit Strategy

  • Exit Options: Consider potential exit options, such as mergers and acquisitions, strategic partnerships, or IPOs, to provide liquidity for investors and shareholders.

Feasibility Study


  • A thorough feasibility study is essential for assessing the viability, risks, and opportunities associated with establishing an insurance company. By conducting a comprehensive analysis of market dynamics, regulatory requirements, financial projections, operational considerations, and risk management strategies, businesses can make informed decisions and develop a strategic roadmap for success in the insurance industry.


Business Plan

A comprehensive business plan is required by the regulator as part of the application process. IML has extensive knowledge in the preparation and submission of business plans and will guide you through the process.


The business plan plays a crucial role in guiding the overall strategy and operations of the insurance company. It provides a roadmap for success and helps outline the company’s goals, objectives, and financial projections.


The feasibility study forms a large part of the business plan and includes Pro forma income statements and balance sheets on a five-year basis, demonstrating the viability of the business plan, and to demonstrate that the applicable Minimum Solvency Margin (MSM) and the Liquidity Ratio (LR) under the Act will be maintained at all times. For a commercial Insurance company, Bermuda Solvency Capital Requirement (BSCR) projection models for the first and fifth year in accordance with the applicable reporting form to demonstrate that the Enhanced Capital Requirement (ECR) prescribed by the Act and the related Rules will be maintained at all times.


Insurer Application Process

IML will then proceed with the incorporation and registration of the insurance company which involves the following steps:

Over the years IML has developed strong relationships and works well with industry partners, we are well positioned to advise on selecting professional service providers (including lawyers, auditors, insurance managers, bankers and actuaries, if necessary)

Application will be sent to the Registrar of Companies to reserve the preferred name of the new company (if approved, the name will be reserved for three months)

Bermuda Monetary Authority (BMA)

Application will be sent to the BMA to incorporate the new company and simultaneously we will submit:
(a) the pre-incorporation form for registration as an insurer (including details of ownership, proposed business plan, five -year pro-forma financial projections and company administration); and
(b) an insurance licensing application to the BMA’s Assessment and Licensing Committee

Registrar of Companies (RoC)

Additionally, we will submit an application for registration of a company to the RoC (including the proposed Memorandum of Association, name reservation and applicable annual government fee).

The RoC will proceed with the registration after receiving notice from the BMA that it has consented to the incorporation of the new company.

Once the incorporation and licensing applications are approved, incorporate and capitalise the new company and convene the initial organisational meetings

File final approved licensing documents with the BMA’s Licensing and Authorisations Department for registration and issue of the licence

The BMA issues the new company’s insurance licence

Company commences insurance operations