Aon highlights casualty, ILS growth and facility innovation ahead of RVS

Aon executives used their annual pre-Monte Carlo briefing to underline shifting dynamics in casualty re/insurance, the scale of capital inflows into insurance-linked securities (ILS), and the expanding role of its broker facilities at reinsurance level.

Amanda Lyons, global product leader at Aon, said that renewal outcomes in US casualty were increasingly differentiated.

“If we think back at the mid-year renewals as a whole, we would say we saw broadly a very stable market. Supply and demand were roughly in balance, but renewal outcomes were incredibly varied based on that casualty sub-line,” she said.

She pointed to specific client behaviours that reinsurers rewarded.

“Clients that fared the best at renewal had a few common characteristics,” Lyons explained.

“First, rate change at or above expected. Second, loss emergence at or below expected. Third, clients that focused on claims handling, with an appreciation of the changing landscape given legal system abuse, litigation funding and nuclear verdicts.”

Lyons added that reinsurers were responsive when cedents brought strong data to the table.

“A good breakout of loss triangles by paid and incurred can really start to identify a pattern when a change in settlement strategy took place, versus just looking like an actual increase in losses,” she said.

Broker facilities scale up

Facilities were presented as a strategic tool for cedents seeking reliable, efficient access to capital.

Alfonso Valera, Aon’s international CEO for reinsurance, said the firm’s suite of facilities had become a vital part of its client proposition.

“We have Marilla that underwrites global property cat, and Marlin, which has been running since 2016, providing property facultative across Latin America, EMEA, UK and Asia Pacific,” Valera explained.

He added: “The most recent and very exciting development is an extension of an existing facility that now accepts facultative reinsurance for a number of classes, not only property but also casualty lines. It is very meaningful for us. It not only provides capacity for our cedents, but it is also tech-driven, so we take out a lot of the friction that comes with facultative.”

Steve Hofmann, Aon’s Americas CEO for reinsurance, emphasised that the facilities were designed to give clients guaranteed, highly-rated capacity.

“These facilities are specifically designed to give clients access to guaranteed, highly rated capacity. We’ve done some very innovative specialised solutions, including Marlin, Marilla and Aon Client Treaty,” he said.

Record cat bond issuance and sidecar expansion

Capital market participation remains central to the reinsurance market narrative, Aon emphasised.

Mike Van Slooten, head of business intelligence at Aon, noted that catastrophe bond issuance in 2025 has already set new records, with strong sponsor and investor appetite.

“The bulk of the new capital you’re seeing really is the rollover of profit. It’s retained profit being redeployed into the marketplace,” Van Slooten said.

“That’s also true in the catastrophe bond space, where the collateral itself is earning 4–5% given where interest rates are. If there are no losses, people are rolling that into the following year, and that in itself is building capacity.”

Lyons also linked demand for innovative ILS casualty solutions with broader growth of capital markets structures.

Casualty focus

Despite volatility, Lyons argued that casualty offers renewed opportunities for reinsurers. “Going into 1/1, there is continued positivity around the primary market, particularly in the US,” she said.

“Primary casualty and excess casualty pricing are at all-time highs, with excess casualty rates up over 143% cumulatively through the first half of 2025 since 2013.”

She highlighted the stabilisation of directors’ and officers’ liability (D&O) and strengthening terms in umbrella and excess as further signs of resilience.

International casualty was also viewed more positively, with reinsurers encouraged by favourable loss development in recent years, Lyons noted.

“Most reinsurers are holding capacity consistent at renewal or looking to grow, and this would mark the first 1/1 in several years without a major player announcing a significant pullback,” Lyons said.

She added: “We’re really excited about the potential launch of new products in casualty and what that could do for the industry. The key here is really great data and an ability to track and underwrite the risk. We’re trying to increase the relevancy of our industry by bringing new solutions to clients.”