Global reinsurance capital hit a new high of approximately USD 735 billion at June 30, 2025, driven mainly by retained and redeployed earnings both in the traditional and alternative capital sectors, according to the Aon’s Snapshot Guide to the Reinsurance Renewal – September 2025 report.
Within the capital total, alternative capital reached a record USD 121 billion, with outstanding catastrophe bond volume rising to USD 54 billion – an almost 20% increase y-o-y. As of August 15, catastrophe bond issuance during 2025 had exceeded USD 17.3 billion, surpassing the full-year total for 2024 (USD 17.0 billion), the report says.
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.
Despite global insured catastrophe losses exceeding USD 100 billion in 1H2025, 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% for 1H2025 – an increase from 89.5% in 1H2024. Meanwhile, reinsurers’ average ordinary investment return decreased marginally to 3.9% (2024: 4.1%) on an annualized basis in the 1H2025, albeit with reinvestment rates generally remaining above book yields.
Overall, reinsurers’ average return on equity was 14.5% on an annualized basis – lower than in 2023 (17.6%) and 2024 (15%), but remaining well ahead of the cost of equity, which is estimated to range from 8% to 10%. Absent unusually large losses, the reinsurance sector remains on course to deliver a third consecutive year of strong results in 2025.
The report reveals Key Themes for January Renewals:
- Buying Power for Strategic Advantage
- Secure the Capital that Accelerates Growth
- Reinsurer Appetite Boosts Industry Relevance
“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”, commented Alfonso Valera, CEO of International for Reinsurance Solutions at Aon.
“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”, said Stephen Hofmann, CEO of the Americas for Reinsurance Solutions at Aon.
The full report can be found here.
