Added reinsurance capacity easily handles higher demand: Aon report

Expanded reinsurance capacity was “more than sufficient” to absorb cedents’ increase in global demand for property catastrophe limit at July 1 renewals, according to an Aon PLC report released Monday.

Reinsurers benefited from both a rise in traditional capital and record performance from insurance-linked securities.

Reinsurance sector capital increased to $720 billion in the first quarter of 2025 after reaching a new high of $715 billion in 2024, driven by reinsurers’ retained earnings, the Aon report said.

Added to that was an estimated record-high $6.5 billion in new catastrophe bond issuance in the first quarter and projections of $10.35 billion of new issuance volume across 32 transactions in the second quarter, including two record $1.5 billion transactions.

The abundant capital further shifted the U.S. property catastrophe reinsurance market in favor of buyers at mid-year renewals despite significant catastrophe losses in the first half of 2025.

First-quarter insured losses from natural catastrophe activity totaled an estimated $60 billion, according to Aon, making it the second-most expensive first quarter on record. Losses were driven mainly by the wildfires in California during January.