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Third-party capital in the insurance-linked securities (ILS) market increased to $145 bn during the first half of 2026, supported by growth in catastrophe bonds and reinsurance sidecars, according to Aon Securities.
Outstanding catastrophe bond volume reached $63.4 bn approximately 17% above the previous mid-year level. New catastrophe bond issuance totaled $17.3 bn during the first six months, exceeding issuance recorded over the corresponding period in 2025.
- Global third-party reinsurance capital reached $145 bn in the first half of 2026, supported by expansion in catastrophe bonds and sidecars.
- Outstanding catastrophe bonds increased approximately 17% to $63.4 bn, while new issuance reached $17.3 bn, exceeding issuance in the first half of 2025.
- Reinsurance sidecar capital rose approximately 35% to $23 bn, driven partly by casualty and whole-account structures that allow investors to manage underlying assets.
The market also recorded an increase in larger transactions. Ten catastrophe bond deals valued at $600 mn or more were completed, representing growth of approximately 40% compared with 2025.
Aon Securities attributed issuance activity to strong investor demand, favorable market conditions and insurers and reinsurers seeking capital market capacity for a wider range of insured perils and geographical exposures.
Catastrophe bond market expands to $63.4 bn
The catastrophe bond market remained a principal contributor to growth in third-party reinsurance capital during H1 2026.
According to Aon Securities, outstanding catastrophe bond notional value reached $63.439 bn at the end of June, while issuance during the period totaled $17.326 bn.
The increased number of transactions exceeding $600 mn indicated stronger activity in larger placements, alongside demand for catastrophe risk capacity across different regions and types of exposure.
Aon Securities’ historical issuance data covers quarterly property catastrophe bond activity from 2017 through the first half of 2026, tracking both new issuance and outstanding notional amounts.
Property cat bonds issued and outstanding
Reinsurance sidecar capital increases 35% to $23 bn
The reinsurance sidecar market also expanded during the first six months of 2026, with total capital outstanding reaching $23 bn as of June 30. That represented an increase of approximately 35% from the $17 bn recorded at the previous mid-year reporting date.
Casualty and whole-account sidecars were an important source of growth, particularly through newly established structures in which investors retain responsibility for managing the underlying assets.
These arrangements allow reinsurers to obtain capital-efficient support for underwriting expansion while providing asset managers with opportunities to manage larger investment portfolios.
Sidecars continued to supply proportional reinsurance capacity across casualty, property and specialty insurance lines, contributing to the expansion of third-party capital alongside the catastrophe bond market.
