Bermuda's economy: insurance offices on a farmless island

What international business adds to the economy

The Department of Statistics' report for 2024 is the clearest picture of where Bermuda's income comes from. Real GDP rose 1.9% to $7.1 billion, the fourth consecutive year of growth, and 6.9% in nominal terms. At current purchasers' prices, GDP per person reached $143,878 at the end of 2024, against $134,450 in 2023.

International business activities, the exempted companies doing business abroad from Bermuda, contributed 29.3% of GDP and grew by $48.5 million. They had 5,040 filled jobs in 2024, a figure the government's statement called historic. Reinsurance, insurance management and portfolio advice drove the increase. Other gains came from information and communication, up $25.1 million on telecommunications, from health and social work, up $21.5 million, and from construction and quarrying, up $21.1 million. Wholesale and retail trade fell by $10.5 million and domestic financial and insurance activities by $10.1 million. The government's statement attributes 67% of the year's growth to local business and 37% to international business; the two shares, as published, sum to more than 100%.

The longer series from the World Bank shows how uneven the path has been. Nominal GDP was $3.5 billion in 2000 and $9.2 billion in 2024. Real output contracted in 2002 and then in every year from 2008 to 2014, with falls of 5.6% in 2009 and 5.3% in 2012, and again by 7.0% in 2020. Growth returned at 4.8% in 2021, 6.3% in 2022, 4.3% in 2023 and 1.9% in 2024.

Income per head depends on who measured it and how. The Department of Statistics gives GDP per person of $143,878 for 2024 at current purchasers' prices. The World Bank series gives $142,250 for the same year, and $118,728 at purchasing power, which adjusts for Bermuda's prices. Britannica's table gives gross national income per person of $145,150 for 2024, while the World Bank's own GNI series gives $139,370. Each figure is correct under its own definition, and none of them is a household income: a large share of the value is produced by companies whose owners live elsewhere.

The share of international business has also been measured differently over time. The Wikipedia economy article reports it rising from 12.6% of GDP in 1996 to 13.8% in 2000, a far lower figure than the 29.3% of 2024, and the same article states elsewhere that international business contributes over 60% of economic output. The definitions behind the three are not given side by side, so the figures are reported here as published.

How the reinsurance business came to Bermuda

The foundation is company law. Most foreign companies are incorporated under the Companies Act of 1981, and a Bermuda company needs only one director and one shareholder, who may be the same person and need not live on the islands. Most file no accounts or annual returns, only an annual declaration of authorised share capital on which the fee is set. The main Wikipedia article counts over 15,000 exempted or international companies on the register, most with no office or staff; the economy article gives more than 12,500. Around four hundred are physically based on the islands and represented by the Association of Bermuda International Companies.

Insurance followed. Large international insurers and reinsurers set up on the islands, and after the attacks of 11 September 2001 a number of new reinsurance companies were formed there. The Wikipedia account puts United States capital in the Bermuda insurance and reinsurance industry at an estimated $163 billion. Offshore companies spent US$967 million on the islands in 2000, and that year directly employed 3,224 people and supported 9,450 jobs directly and indirectly.

Regulation tightened after a KPMG review in October 2000 found the legislative framework short of international standards. The Trust (Regulation of Trust Business) Act 2001 moved trust licensing from the finance minister to the Bermuda Monetary Authority, which regulates the financial sector and the Bermuda Stock Exchange but is not a central bank and offers no lender of last resort. It applied the Basel II banking rules from 1 January 2009 and Basel III from 1 January 2015. Four banks operated in March 2014, with consolidated assets of $24.3 billion.

The sector shaped politics as well as revenue. The Wikipedia economy article attributes the failed independence vote of 1995 partly to fears of scaring away foreign firms, and the British passport and Royal Navy cover that came with territorial status also kept the shipping register attractive. The Bermuda Stock Exchange, which lists equities, debt, funds and depository receipts, is a full member of the World Federation of Exchanges.

The absence of corporate tax had a second use. The Wikipedia account records that Google shifted more than $10 billion of revenue to a Bermuda subsidiary, reducing its 2011 tax liability by $2 billion, and names the arrangement known as the Bermuda Black Hole.

Why Bermuda taxes payrolls and imports

Bermuda levies no personal income tax and no consumption tax. A corporate income tax was introduced only in 2025, and it applies to multinational groups with annual revenue of €750 million or more. Britannica describes the result: low income taxes, with most revenue drawn from tariffs and from taxes on real estate and tourism.

The figures bear it out. In the 2018/19 fiscal year actual government revenue was $1,090 million, of which payroll tax brought in $467 million and customs duties $226 million, and the deficit was $77.8 million after $58.6 million of capital spending. Two decades earlier, in 1998 to 1999, import duties provided slightly more than $166 million, about 30% of revenue, and they show up in retail prices.

Debt grew fast after 2008. The Wikipedia account records it rising by 20% or more every year from 2008 to 2014. In May 2020 government debt stood at $2.68 billion and the debt limit was raised to $2.9 billion for spending on COVID-19; net borrowings were $2.586 billion that year, and a report in September 2020 put the ratio of debt to revenue at 340%. Annual interest was $127.1 million, $354 million of debt matured in January 2023 and a further $402 million in February 2024.

How tourism rose and fell back

Tourism came first. Visitors from North America arrived by sea from the Victorian era, by air in growing numbers after 1948, and the trade peaked in the 1960s and 1970s before international business overtook it by the end of that decade, as the history of Bermuda describes. The decline was measured in bed nights: from over 2.4 million in 1995 to 1.9 million in 2001. Visitors spent an estimated $475 million in 1996 and $431 million in 2000, and the industry employed 5,700 people directly in 2000.

The mix has since shifted to ships. In 2024, by the Wikipedia figures, about 535,000 visitors came by cruise ship and about 140,000 by air, yet air visitors accounted for 78% of the $531 million they spent.

The Bermuda Tourism Authority's report for 2025 found total visitor spending of $550 million, up 3.5%, while air arrivals fell 1.9%, partly because of storm cancellations from August to early November and reduced flights from New York's JFK, Boston, Philadelphia and Washington. Arrivals from Canada rose 26% to about 20,000, and 119 superyachts called, with direct spending estimated at $6.1 million. Hotel stock remained well below 2019 levels because of the continued closure of the Fairmont Southampton, while average daily rates rose 10.1%. In the first half of 2026 arrivals were up 9.2% on the same period of 2025, mostly on cruise passengers, and hotel occupancy over the six months was 61.4%.

What the islands still grow and make

Farming once paid. Before the Second World War the main export was early vegetables and flowers shipped to New York, from three crops a year. Easter lily bulbs were the high-value line: disease had cut exports to 23 cases in 1918, and after the plant pathologist Lawrence Ogilvie identified the cause as a virus, 204 lily fields shipped 6,043 cases in 1927. The US Smoot-Hawley tariff of 1930 ended much of the vegetable trade, and Japanese growers took most of the lily market in the 1940s.

Little remains. Agriculture, forestry and fishing made up 0.2% of GDP in 2024 in the World Bank series, manufacturing 0.3% and services 91.3%. About 80% of food is imported. Britannica lists fresh vegetables, bananas, citrus, milk, eggs and honey as local produce, a small fishing industry, sand and limestone quarried for building, and a few light manufacturers of paint, pharmaceuticals, electronics and printed matter. Arable land was recorded at 14.8% of the total in 2012.

Imports come mostly from one direction. Britannica puts the United States' share of imports by value at nearly seven tenths, and the main Wikipedia article at over 71%. Exports in 2006, mostly re-exported pharmaceuticals, were valued at $783 million. In the World Bank series, exports of goods and services, which include the services sold by international companies, were equal to 55.1% of GDP in 2024 and imports to 25.1%.

Who does the work on the islands

The workforce is partly imported too. Of 38,947 workers in 2005, government figures counted 11,223, or 29%, as non-Bermudians, many of them accountants, insurers and finance specialists from the United Kingdom, the United States, Canada, the West Indies and South Africa, and others in hotels, construction and landscaping. In 2004 the labour force of 38,360 was split roughly evenly between clerical, sales, service, professional and managerial occupations, with 3% in agriculture and fishing, and unemployment was 2.1%.

Work permits are the adjustment valve. In the recession of the early 1990s the economy contracted and the population fell by 2,000, as the work permits of many long-term residents were not renewed. Organised labour is long established: about 25% of workers were union members in 2000, and days lost per worker involved in disputes fell from 65 in 1991 to 0.8 in 1999. The Wikipedia account records that 19% of the population lived below the poverty line in 2000.

How the Bermudian dollar is tied down

In 1970 the colony replaced the Bermudian pound with the Bermudian dollar, pegged one to one with the US dollar. The two circulate side by side for most purposes on the islands, though the Bermudian dollar is not normally traded abroad and banks charge a fee to change it into US dollars for use outside. The Bermuda Monetary Authority issues all notes and coins. The record on this site lists the currency under its ISO code, BMD.

The flag is for hire as well. The Department of Maritime Administration keeps an open ship registry: in 2012, 105 of the 139 vessels registered were foreign-owned, and 160 ships were registered in 2017. Cunard registered all its ships in Bermuda in 2011 so that its captains could marry couples at sea, adding hundreds of thousands of dollars a year to a registry that already took in about $3 million. An open aircraft register runs alongside it.