Cat bond market hits $50bn as Q1 issuance jumps

The catastrophe bond market has grown to approximately $50 billion, with over $6.2 billion in new issuances in the first quarter, according to Aon.

Q1 issuance was up 61% from the previous record of $3.9 billion in 2024.

The rise in alternative insurance capital saw it reach a new high of $115 billion at the end of 2024, said Aon, up $7 billion in the year as existing participants reinvest profits and new entrants commit funds to the market.

In addition to the robust growth of the cat bond market, the broader ILS market saw further growth in sidecar capital in 2024, said Aon in its Reinsurance Market Dynamics report. 

Overall, global reinsurer capital reached a new high of $715 billion in 2024, driven primarily by retained earnings and new inflows to “sidecar” structures and the cat bond market.

“Growth of alternative capital continues to outpace that of traditional, creating new and diversified sources of capital for protection buyers, and an ever-growing suite of opportunities for investors to gain access to uncorrelated insurance risks across the broader property and casualty market,” wrote Mike Van Slooten, Aon head of market analysis and Richard Pennay, CEO of Aon insurance-linked securities.

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