Report: record $16.8bn issuance in cat bond market
The catastrophe bond market reported a record issuance of more than $16.8 billion in the first half of 2025 – a period that comprised the two largest transactions in the history of the market, each exceeding $1.5 billion.
This was detailed in Aon’s just-released report, Reinsurance Market Dynamics Midyear 2025 Renewal.
The professional services firm also said that reinsurance capital increased to $720 billion by the end of Q1 2025, driven by the retained earnings of established reinsurers.
Aon found that despite an active first half of the year for natural catastrophe losses, midyear renewals experienced a broadly competitive environment, as reinsurers, insurance-linked securities markets and new entrants, sought to deploy capacity and grow market share.
This accelerated buyer-friendly conditions, with reinsurers offering greater flexibility in terms and conditions, and options for insurers to purchase expanded coverage.
Despite the impact of the California wildfires, two thirds of reinsurers tracked by Aon achieved double-digit return on equity in the first quarter on an annualised basis.
Total global reinsurance capacity was more than sufficient to absorb increased demand for reinsurance during the June/July renewals, particularly from American insurers.
Changing views of natural catastrophe exposures was also a big factor, with recent wildfires in the United States, and floods in Brazil prompting insurers to evaluate loss potential and protection needs.
The midyear renewal was notable for a further shift in the market’s appetite, with reinsurers more willing to provide protection lower down on programmes.
Aon said that while some reinsurers have pulled back from parts of the US casualty market, others are increasing their participation, resulting in stable capacity overall.
Steve Hofmann, Aon US chief executive officer of reinsurance solutions said prevailing market conditions create opportunities for insurers to address specific issues, or to adjust programme structures and coverage to reduce volatility in both property and casualty.
• See Related Media for the full Reinsurance Market Dynamics Midyear 2025 Renewal
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