The insurance-linked securities (ILS) market grew to $144.5 billion as of the end of June 2026, which re/insurance broking group Aon says represents an annual growth rate of 8.4% over the past five years, ensuring ILS has become a source of “foundational reinsurance capital.”
Aon Securities’ 20th and latest ILS market report analyses sector activity during the 12-months ending June 30, 2026. It reveals that catastrophe bond issuance amounted to $24.9 billion in the period, making it the highest 12-month total on record, and 15% higher than the previous record of $21.8 billion, according to Aon’s data.
At the same time, the size of the outstanding cat bond market, so including all in-force transactions, hit a record $63.4 billion as of the end of June 2026, which is an increase of 17% from the end of June 2025, reflecting an estimated 11.6% compound annual growth rate over the past 10 years.
During the 12-month period reviewed by Aon, a record 78, including 16 new sponsors leveraged the cat bond market to augment their reinsurance needs. Aon’s report finds that insurers were the largest issuers by group, making up 65% of the total, followed by reinsurers at 17%, governments at 16%, and then corporate entities at 1.5%.
Further, based on the Aon Securities Catastrophe Bond Total Return Index, cat bonds generated a return of 12.5% for investors during the 12-month period under review, with the broker highlighting coupon income as a key driver of investor returns and reinvestment.
As highlighted and discussed in great detail by Artemis, our ILS-focused sister publication, in its quarterly cat bond reports, cat bonds and the wider ILS market now spans all property and casualty insurance lines, which is supported by the rise of asset-intensive sidecars.
According to Aon, outstanding sidecar capital rose to $23 billion across both property and casualty lines, approximately 50% higher than year-end 2024, driven by both strong margins and growth in casualty-focused sidecars reinsurance vehicles.
“The past 12 months marked an important milestone for the ILS market as it continued to evolve into a source of foundational reinsurance capital for clients globally. As the market expands across additional risks and products, it is providing clients with another source of durable capital while continuing to attract investor interest,” said Richard Pennay, CEO, Aon Securities.
All of the Artemis quarterly cat bond and related ILS market reports are available to download for free, and you can also read about hundreds of cat bond transactions since the market’s inception on the Artemis Deal Directory.
