Reinsurance Sidecars Hit Record $23 Billion
The collateralized reinsurance sidecar market has grown to a record $23 billion in invested capital by mid-2026, a 50% increase since late 2024, according to Aon Securities.
The market for collateralized reinsurance sidecars reached a new record of $23 billion in invested capital by the end of June 2026. This figure, estimated by Aon Securities, represents roughly 50% growth since the end of 2024.
Aon Securities has tracked the segment's rapid expansion. Data shows outstanding capital was $10 billion in mid-2024. It then surged 70% to $17 billion by June 30, 2025.
Momentum continued in the back half of 2025. By September 30, 2025, 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 $17.9 billion property sidecar market and a roughly $1.7 billion casualty sidecar market. For the full year 2025, sidecar capital grew by more than $5 billion, with casualty and non-catastrophe vehicles cited as key drivers.
| Period | Estimated Sidecar Capital (USD Billion) |
|---|---|
| Mid-2024 | $10 |
| June 30, 2025 | $17 |
| September 30, 2025 | $19.6 |
| End of June 2026 | $23 |
Drivers of Growth
Aon Securities states the sharp increase to $23 billion was fueled by earnings from existing sidecars and new vehicles primarily employing asset-driven strategies for casualty and whole-account portfolios.
The broker's report highlights favorable conditions. Short-tailed strategies for property and specialty remain popular with clients and investors as existing relationships remain balanced in a softening market, Aon Securities said. In the asset-driven space, favorable conditions for both (re)insurers and asset managers have coincided to match issuance with strong demand. Attractive premium levels and raise interest rates continue to underline the attractive economics for deploying third-party capital into the (re)insurance markets, the firm added.
Asset managers seeking scalable private credit investment opportunities have increasingly recognized sidecars as a meaningful foundation for insurance asset management and a source of attractive returns. For (re)insurers, sidecars offer a capital-efficient way to write more business, receive favorable commission income, and establish partnerships with high-quality asset managers.
Structural Evolution
Reinsurance sidecars continue to be heavily structured around two main portfolio approaches: assumed sidecars and ceded (ReShare) sidecars.
Assumed structures are generally used to provide customised capacity, aligned partnerships, and fee income, whereas ceded structures tend to concentrate on ensuring reliable capacity and help smoother execution. Aon Securities observes that more sponsoring entities are taking a portfolio-based approach to ceding risk rather than limiting sidecars to a single line of business.
This shift allows for a wider array of risks, including specialty lines, thereby further improving diversification. This evolution reflects the broader maturation of the ILS market, as sidecars increasingly operate as institutional capital structures rather than tactical capacity vehicles, the firm concluded.
Market Outlook
Aon Securities expects this trend toward greater diversification and new sponsoring entities and investor entrants to continue.
