Reinsurance capital hits $735b amidst strong earnings

Also, 38% of global catastrophe losses in the first half of 2025 were uninsured.

Global reinsurance capital hit a record $735b as of 30 June, driven by retained and redeployed earnings in both traditional and alternative markets, according to Aon’s Snapshot Guide to the Reinsurance Renewal – September 2025.

Aon’s catastrophe recap report also highlighted that 38% of global catastrophe losses in the first half of 2025 were uninsured, presenting opportunities to expand coverage, especially in regions with low penetration.

Alternative capital climbed to an all-time high of $121b, with catastrophe bond volume rising nearly 20% year-on-year to $54b. 

As of August 15, catastrophe bond issuance had exceeded $17.3b for the year, surpassing the 2024 full-year total of $17.0b.

Aon noted that sidecars are becoming a growing source of proportional reinsurance capacity, particularly as casualty sidecars expand the market’s reach. 

Demand for facultative reinsurance also increased as insurers used it to support growth in a competitive market.

Despite global insured catastrophe losses exceeding $100b in the first half of 2025, ceded losses to reinsurers remained limited, helping capacity remain strong. 

The average combined ratio for 30 global reinsurers rose to 94.8% from 89.5% a year earlier, whilst average investment return slipped slightly to 3.9% from 4.1%.

Reinsurers’ average return on equity reached 14.5% on an annualised basis, down from 17.6% in 2023 and 15% in 2024 but still above the cost of equity, estimated at 8% to 10%. 

Barring large losses, the sector is on track for a third consecutive year of solid results.