Global reinsurer capital increased by more than 6% from the end of 2024 to $760 billion as at September 30th, 2025, with growth in both traditional and alternative capital, driven by retained earnings, unrealised gains, and new inflows to sidecars and the catastrophe bond market, according to Aon’s January 2026 Reinsurance Market Dynamics report.
Last week, insurance and reinsurance broking group Aon released some headline figures from its January 2026 reinsurance renewal report, which has now been published in full.
One of the data points discussed briefly in last week’s release was that global reinsurer capital reached new heights in the first nine months of 2025, expanding by $45 billion from the end of 2024 to the aforementioned $760 billion.
Of this total, traditional capital accounts for $636 billion, so is up by 6% or $36 billion from $600 billion at year-end 2024, as alternative, or third-party capital increased by almost 8% to $124 billion, compared with $115 billion as at the end of December 2024.
“Growth was driven by retained earnings, unrealized gains on bonds taken directly to equity and new inflows to sidecars and the catastrophe bond market,” says Aon.
The broker notes that investments in new rated startup reinsurance companies remained very modest in 2025. At the same time, on the alternative side of the market, Aon states that increased investor appetite is lowering retrocession costs and enabling traditional reinsurers to expand their sidecar and/or catastrophe bond programmes.
As reported by our insurance-linked securities (ILS) focused sister publication, Artemis, catastrophe bond issuance set numerous records in 2025, including record issuance of more than $25 billion, the first time annual issuance has exceeded the $20 billion mark.
As well as capital levels, Aon’s latest reinsurance sector report explores the results of traditional reinsurers, and claims that most companies will once again produce a strong result in 2025, despite a costly start to the year driven by the record wildfire loss in California, as the move away from frequency risks saw the primary market assume a greater share of losses from so-called secondary perils.
“Consequently, most reinsurers remained well within their annual major loss budgets and strong underlying margins were reflected in an average combined ratio of 91.0 percent at the nine-month stage, across 23 companies surveyed,” explains the report.
An average combined ratio of 91% for 9M’25 across the 23 reinsurers compares with 91.3% for full-year 2024, 90.7% for full-year 2023, and then 96.2% in 2022, which was prior to the property market reset.
“Investment returns continue to provide strong support to overall earnings. The average ordinary yield, relating mainly to interest and dividend income, remained at 4.1 percent on an annualized basis in the first nine months of 2025. Mark-to-market gains on bonds and equities provided a significant boost to total returns,” continues the report.
The average return on equity (ROE) was also strong in 9M’25 at 16%, compared with 15% in 2024 and 17.6% in 2023, which followed consecutive years of reinsurers failing to meet their cost of capital.
“Traditional reinsurance capital is at very strong levels relative to the risk being written today, and still building, net of significant returns to investors. This weight of capital is increasing competition, softening pricing, and sharpening the focus on alternative avenues for growth, including strategic M&A, product innovation and diversification to complement organic growth initiatives,” says Aon.
