CHICAGO, Sept. 5, 2025 - Aon plc (NYSE: AON), a leading global professional services firm, today launched its Snapshot Guide to the Reinsurance Renewal – September 2025 report, which highlights a continuation in reinsurance buyer momentum at the beginning of the January 1 renewal season.
The report reveals that global reinsurance capital hit a new high of approximately $735 billion at June 30, 2025, driven mainly by retained and redeployed earnings both in the traditional and alternative capital sectors.
Within the capital total, alternative capital reached a record $121 billion, with outstanding catastrophe bond volume rising to $54 billion – an almost 20 percent increase year-over-year. As of August 15, catastrophe bond issuance during 2025 had exceeded $17.3 billion, surpassing the full-year total for 2024 ($17.0 billion).
As part of the alternative capital environment, the report emphasizes how sidecars have become an important and growing source of proportional reinsurance capacity by helping insurers to manage claims frequency and volatility. The development of casualty sidecars has marked a significant evolution, further broadening the market’s reach.
Data show that there was also heightened demand for facultative reinsurance, due to its importance as a strategic tool to support insurer growth in an increasingly competitive insurance market.
Despite global insured catastrophe losses exceeding $100 billion in H1 2025, ceded losses to reinsurers remained relatively benign, with capacity continuing to be buoyed by healthy reinsurer results. The average combined ratio across 30 global reinsurers was 94.8 percent for 1H 2025 – an increase from 89.5 percent in 1H 2024. Meanwhile, reinsurers’ average ordinary investment return decreased marginally to 3.9 percent (2024: 4.1 percent) on an annualized basis in the 1H 2025, albeit with reinvestment rates generally remaining above book yields.
Overall, reinsurers’ average return on equity was 14.5 percent on an annualized basis – lower than in 2023 (17.6 percent) and 2024 (15 percent), but remaining well ahead of the cost of equity, which is estimated to range from eight to 10 percent. Absent unusually large losses, the reinsurance sector remains on course to deliver a third consecutive year of strong results in 2025.
According to Aon’s Global Catastrophe Recap: First Half 2025 report, while 38 percent of overall global catastrophe losses were not insured in 1H 2025, certain regions exhibited much lower insurance penetration. This dynamic highlights opportunities for growth, and throughout this renewal season and beyond, Aon will support its clients to achieve such growth profitably.
Alfonso Valera, CEO of International for Reinsurance Solutions at Aon, said: “Buyers can use the favorable reinsurance market dynamics to seize a strategic advantage, and so we are assisting our clients to secure the capital that can accelerate growth. Success in today’s re/insurance market depends on anticipating and responding to change and opportunity using the full spectrum of solutions.”
Stephen Hofmann, CEO of the Americas for Reinsurance Solutions at Aon, said: “Insurers can stay competitive and remain relevant to their customers by leveraging attractively priced and diverse capital, and revisiting their long-term strategies and product mixes to support growth and manage volatility. Building best-in-class strategies – from capital deployment and talent to distribution focus and underwriting innovation – is essential for thriving in today’s attractive, yet dynamic market.”
To read the full report, please visit: https://aon.io/466NcPw
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