Three key dominant trends have been revealed following a record period of catastrophe bond issuance according to Richard Pennay, CEO, Aon Securities, the specialist investment banking and insurance-linked securities (ILS) broker-dealer unit of the global insurance and reinsurance broker.
However, as we’d previously reported, the 12-month run-rate for cat bond issuance could be even higher if you looked at a different period, as we counted just slightly under $23 billion of issuance between August 2024 and July 2025.
Moreover, the surge in catastrophe bond issuance has fueled alternative capital in reinsurance supplied by ILS strategies and structures to reach a record new high of $121 billion by mid-2025, which Aon Securities notes was also driven by continued expansion of the sidecar sector as well.
Writing in Aon Securities’ latest ILS annual report, Pennay explained that over the Relevant Period, catastrophe bond issuance activity has accelerated, which ended up revealing three dominant trends.
“First, insurer participation surged to 58% of total issuances, driven by rising capital requirements linked to model changes and a growing appetite for diversified and multi-year sources of capacity,” Pennay said.
“Second, regional concentration intensified, with 93% of new issuances tied to North America—reflecting investor comfort with U.S. risk models and the appeal of broader risk margins.”
Pennay continued: “Third, for the first time ever, Florida-focused issuances climbed to $5 billion, marking a 46% increase from the prior twelve-month period running from July 2023 to June 2024 and capturing 16.6% of the total outstanding catastrophe bond market, underscoring investor confidence in peak- zone protection.”
Pennay also went on to explain that total outstanding catastrophe bond volume increased by $9 billion during the relevant period to a record $54 billion as of June 30, 2025, representing a 19% increase since June 30, 2024 and underscores the market’s “continued expansion, stability and permanence.”
The CEO also states that a successful and healthy capital raising climate, robust reinvestment of capital from maturing bonds and coupon payments, and attractive risk spreads on the outstanding catastrophe bond portfolio, has fueled ongoing investor demand for the product.
Based on the Aon Securities Catastrophe Bond Total Return Index, the 144A cat bond market generated a return of 14.1% over the Relevant Period.
Concurrently, Pennay also noted that maturities provided $12.9 billion of re-deployable capacity over the Relevant Period, recycling more capital back into the market.
“This momentum has been matched by growing client engagement during the Relevant Period, with 52 repeat clients and 13 new entrants sponsoring the issuance of catastrophe bonds,” Pennay added.
The Artemis Deal Directory lists all catastrophe bond and related transactions completed since the market was formed in the late 1990’s.
Analyse the catastrophe bond market using our charts and visualisations, which are kept up-to-date as every new transaction settles.
As a reminder, you can download our free quarterly catastrophe bond market reports here.
