Reinsurance sidecars remain key in 2026, as third-party capital deployment holds stable: Aon Securities

Reinsurance sidecars remain a key theme in 2026, with third-party capital deployment holding broadly stable despite a rapidly evolving landscape of perils and structures, according to Aon Securities, the broker-dealer and investment banking arm of the broking firm.

Writing in the broker’s latest reinsurance market report, Aon Securities observed that increased investor appetite is helping traditional reinsurers expand their use of collateralized vehicles, even as total sidecar capacity leveled off through the first quarter of the year.

Aon Securities has been heavily tracking the expansion of the reinsurance sidecar market over recent years.

Data from the firm showed that reinsurance sidecars reached a new record high of $17 billion as of June 30th 2025, representing a 70% expansion of this segment of the ILS market in just one year, and marked a notable increased from Aon’s previous estimate that outstanding reinsurance sidecar capital had reached $10 billion at the middle of 2024.

Growth accelerated through the back half of 2025. By September 30th, 2025, Aon’s data showed that the sidecar segment grew its invested capital base a further 15% in the third quarter alone, reaching $19.6 billion. This total consisted of a property sidecar market at $17.9 billion of invested capital and a casualty sidecar market at around $1.7 billion.

Earlier this year, the insurance-linked securities and investment banking focused Aon Securities team revealed that it estimates sidecar capital grew by more than $5 billion over the course of full-year 2025, with casualty and non-catastrophe vehicles highlighted as a key driver of the sidecar market expansion.

The sidecar market has sustained its momentum into 2026, as Aon Securities highlights in the broker’s latest reinsurance market report.

“Sidecars remain a major theme in 2026, with overall capital deployment broadly stable and considerable investor interest in asset-driven sidecar vehicles for casualty and whole-account portfolios,” the firm said.

“Investors are increasingly looking to assume assets within these vehicles, taking a combination of asset risk and underwriting risk, while clients view them to secure more favorable commission terms and support further growth.”

Aon notes that demand is currently strongest for these asset‑driven casualty and whole-account portfolios, aided by elevated premium rates and the ability to allocate to higher-yielding assets. The broker remains bullish that substantial activity for these products will continue for the remainder of 2026.

“Rapid growth in casualty sidecars and a broader suite of perils and structures show how capital markets solutions are becoming more flexible and better aligned with cedents’ evolving risk and capital needs,” Aon Securities added.

Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.