Aon Securities, the broker-dealer and investment banking arm of the broking giant, believes catastrophe bond market and broader third-party reinsurance capital activities will remain robust through the rest of 2026, according to CEO Richard Pennay.
A number of factors are expected to keep driving cat bond and broader insurance-linked securities (ILS) market activity levels, with levels of capital available key to this.
On the one hand, investor appetite for accessing returns from insurance and reinsurance related risks remains high.
While a second capital factor is the availability of capital from maturing cat bond and other third-party capital arrangements, which will require recycling into new deals.
Richard Pennay, CEO, Aon Securities explained, “Looking ahead to the remainder of 2026, we anticipate that the catastrophe bond market and broader third-party capital activity will remain robust, supported by strong investor appetite, the continued recycling of maturing limit and attractive returns.
“Aon Securities is uniquely positioned to help our clients raise third-party capital as we recently surpassed $100 billion during the past 25 years.”
In its latest reinsurance report from Aon, the Securities division highlights the strong wave of momentum that third-party and ILS capital came into 2026 with.
Near-record issuance of catastrophe bonds so far in 2026, alongside expanding capacity allocated to collateralized reinsurance sidecar structures, and importantly growing ILS market participation from cedants are all helping to define this robust period for the capital markets in reinsurance.
“With total outstanding catastrophe bonds on track to exceed $61 billion, and overall third-party capital nearing $136 billion, cedents are benefiting from deeper, more flexible sources of fully-collateralized capacity that complement traditional reinsurance and support sustained growth,” Aon Securities explained.
Aon Securities cites “unprecedented demand” both for reinsurance in general and particularly for the share taken by ILS and capital markets, saying that, “Investors were happy to respond to this demand having achieved strong returns in recent years.”
Also read: Reinsurance demand up ~10% at April 1st renewals, significant rate reductions seen: Aon.
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