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ILS capital hits $144.5bn as alternative reinsurance funds rise

Aon estimates alternative and ILS capital deployed in reinsurance grew to $144.5 billion at June 30, 2026, up $3.5 billion in the second quarter alone.

Reported · Written up by our desk · Reinsurance

Insurance-linked securities capital has become a “foundational” source of reinsurance funding, according to Aon Securities’ latest ILS market report.

Aon estimates alternative capital deployed through ILS and related collateralized structures reached $141.0 billion at the end of the first quarter of 2026, then rose to $144.5 billion at June 30, 2026, a gain of $3.5 billion in the second quarter. The estimate implies roughly 2.5% growth in the last quarter even as early maturities helped create additional capital to reinvest.

The report also points to continued growth in catastrophe bonds and the broader ILS market, with a five-year compound annual growth rate of 8.3% for alternative and ILS capital in reinsurance. It notes the catastrophe bond market has grown faster over the same period, at an 11.6% CAGR over the last decade.

Aon said the past 12 months marked a milestone as the ILS market broadened across property and casualty reinsurance lines, supported by new structures including asset-intensive sidecars executed for both insurers and reinsurers with large investors.

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