The Reinsurance Daily

Aon Sees Sidecar Capacity Stabilize at $17B as Cat Bond Market Hits Record $11.3B Q2 Issuance

By The Reinsurance Daily Editorial ·

Aon Sees Sidecar Capacity Stabilize at $17B as Cat Bond Market Hits Record $11.3B Q2 Issuance

Aon Securities: Sidecar Market Stabilizes as Third-Party Capital Holds Firm

Reinsurance sidecars commanded approximately $10 billion of third-party capital in the first half of 2026, marking a period of stability for the vehicle class after years of fluctuation. According to analysis from Aon Securities, while overall alternative capital in reinsurance grew to $107 billion, sidecar deployment has found a consistent level, attracting investors seeking specific, non-correlating risk tranches. This contrasts with the record-breaking issuance seen in the catastrophe bond market. The total volume of disclosed sidecar transactions reached $1.7 billion in H1 2026, consistent with prior-year activity. This indicates that while the broader ILS market expands, capital allocated to sidecars is holding steady, prioritizing established relationships and proven underwriting teams rather than chasing broad market growth. Approximately 70% of this capital is focused on property catastrophe risk.

According to Aon Securities, total sidecar capital outstanding was estimated at around $17 billion to $18 billion pre-2017, falling to around $10 billion in recent years, but now the broker feels the market has reached a level of stability, with capital levels holding largely firm.

PERILS Confirms Victoria Bushfire Loss Creep to AU $860M

PERILS AG has issued its third loss estimate for the February 2026 bushfires in Victoria, Australia, raising the insured market total to AU $860 million (approx. US $568 million). This represents a notable increase from its second estimate of AU $810 million released three months prior and a significant jump from the initial figure of AU $786 million. The loss development underscores the complexity of claims from secondary perils. The updated figure is based on detailed claims data collected from the Australian insurance market. Property lines of business contributed 68% of the total loss, with motor claims accounting for the remaining 32%. The continued upward revision months after the event serves as a material data point for underwriters pricing aggregate covers and managing secondary peril exposures in the APAC region.

Cat Bond Issuance Shatters Records with $11.3B in Q2 2026

The catastrophe bond market posted its most active quarter and half-year on record. New issuance in Q2 2026 reached an unprecedented $11.33 billion, pushing the total for the first half of the year to $19.6 billion. This torrent of activity has driven the total outstanding market size to a new high of $65.6 billion, according to the Artemis Deal Directory. The Q2 figure surpasses the previous quarterly record of $10.5 billion, demonstrating robust investor appetite and a continued push by cedents to access diversified capital sources. The record issuance reflects favorable pricing conditions for sponsors and a strategic move to lock in multi-year retrocessional and reinsurance capacity against a backdrop of volatile traditional markets.

Lemonade Enters New England Markets Amidst Underwriting Scrutiny

InsurTech carrier Lemonade has expanded its renters insurance product into Maine and Vermont, with policies starting from $5 per month. The expansion continues the company's strategy of rapid geographic growth, now covering most of the US. However, this growth coincides with challenging financial results. The company's Q1 2026 filings revealed a gross loss ratio of 159% for its renters book. While expanding its total insured value to $1.3 billion, the underlying underwriting performance remains a significant concern for its reinsurance partners. In Q1 2025, the company reported $35.8 million in gross written premium for the renters segment, which grew to $62.4 million by Q1 2026, illustrating the pace of its top-line expansion against deteriorating loss metrics.

Ryan Specialty Appoints Smith as CEO of New Renewables Unit

Ryan Specialty has named Brian Smith the Chief Executive Officer of Ryan Specialty Renewables, a new dedicated underwriting unit. Smith, who reports to Miles Wuller, President and CEO of Ryan Specialty Underwriting Managers, will lead the firm’s strategic push into the renewable energy sector. This move signals a formalization of the MGU’s capabilities in a high-growth area, encompassing solar, wind, and battery energy storage systems (BESS). The creation of a standalone unit under a dedicated CEO highlights the increasing specialization required to underwrite complex risks associated with the global energy transition.

Enterprise Risk Associates Acquires Florida-Based Agency

Enterprise Risk Associates (ERA), a portfolio company of BRP Group, has acquired Insurance Solutions of America, a Florida-based agency specializing in commercial and personal lines. The agency generates over $150 million in annualized premium. This transaction expands ERA's footprint in the challenging Florida market, adding a significant book of business and local expertise. The move, announced by ERA CEO Tim DePriest, reflects the ongoing consolidation trend among specialist retail and wholesale agencies, as larger platforms seek to acquire niche capabilities and market access, particularly in catastrophe-exposed regions like the Southeast.

Key Takeaways

Sources

Reinsurance sidecars remain key in 2026, as third-party capital deployment holds stable: Aon Securities — artemis.bm
PERILS raises Victoria bushfire insured market loss estimate to AU$860m — artemis.bm
Catastrophe bond market records that were set in Q2 2026 — artemis.bm
Markets/Coverages: Lemonade Enters Maine and Vermont Renters Insurance Markets — insurancejournal.com
Ryan Specialty Underwriting Managers Names Smith Ryan Specialty Renewables CEO — insurancejournal.com
Enterprise Risk Associates Buys up Florida-Based Insurance Solutions of America — insurancejournal.com