Alternative or third-party reinsurance capital, so that deployed through insurance-linked securities and related collateralized structures, grew by 18% over the course of 2025 and 10% just in the fourth-quarter to reach a record $136 billion at the end of the year, according to the latest estimate from broker Aon.In a just released new report from Aon’s Reinsurance Solutions, the broker explains that global reinsurance capital reached another new high at the end of last year.Having previously reported that total reinsurance capital reached $760 billion by the end of September 2025, Aon now puts the total 3% higher at $785 billion by the end of December., but with the December 31st figure of $136 billion it reflects very strong ILS market expansion of almost 10% just in the fourth-quarter of the year.

One again, capital deployed in insurance-linked securities and third-party investor backed structures has outpaced traditional reinsurance capital growth meaningfully.Traditional reinsurance capital is estimated by Aon to have grown by 8% in full-year 2025, compared to third-party capital’s 18% growth.While in the fourth-quarter alone traditional capital grew by only 2%, compared to the alternative market’s almost 10% expansion.

Overall reinsurance capital grew by around 10% in calendar year 2025, according to Aon’s estimate, with alternative and ILS capital from third-party investors the major driver.Aon explained, “Growth was driven by strong retained earnings, additional mark-to-market gains on bonds taken directly to equity and new inflows supporting sidecars and catastrophe bonds.Movements in exchange rates also had an impact, as the value of the U.S.

dollar relative to the euro was almost 13 percent lower at the latest conversion date.” Commenting on ILS and other third-party capital in reinsurance the broker further stated, “Third-party capital is estimated to reach a new high of $136 billion at December 31, 2025, a sizeable jump of $21 billion relative to the end of 2024.“Strong non-correlating returns are continuing to attract new commitments and reinvested profit.Increased investor appetite is lowering retrocession costs and allowing many traditional reinsurers to expand sidecar and catastrophe bond programs.” These record capital levels give the reinsurance industry ample room to absorb growing risks, Aon stated..

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.