Aon reports that alternative reinsurance capital reached a record high of $115 billion by the end of 2024.

According to Aon’s Reinsurance Solutions, alternative reinsurance capital—comprising insurance-linked securities (ILS) and third-party investor contributions—grew by 7% in 2024, reaching a record $115 billion by year-end. This marks an increase from the $113 billion reported at the end of September 2024, with ILS capital expanding nearly 2% in the final quarter.

Aon attributes this rise primarily to strong inflows in the catastrophe bond market, which saw significant activity in early 2025. In its latest report, Aon noted that market conditions encouraged existing participants to reinvest profits while attracting new investors. Increased appetite for alternative reinsurance has allowed traditional reinsurers to expand their catastrophe bond programs and sidecar structures, boosting capacity.

The report also highlighted a broader increase in global reinsurer capital, which grew by $45 billion to reach $715 billion in 2024, driven largely by retained earnings and new inflows. Global reinsurer equity also rose by $38 billion to $600 billion, aided by strong earnings and a reversal of unrealized losses on fixed-income securities. However, capital growth was partially offset by increased returns to investors.

Aon expects continued expansion in alternative capital, fueled by growing demand for risk protection and the rising use of third-party capital structures like sidecars. The firm emphasized that alternative capital is outpacing traditional reinsurance, providing more diversified sources of protection and investment opportunities in the property and casualty market.

Similarly, reinsurance broker Gallagher Re reported that alternative reinsurance capital reached an all-time high of $114 billion by the end of 2024, reflecting a 7% increase over the year.