Emerging Risks Could Drive $5bn Annual Growth in Casualty Reinsurance Market

Aon plc (NYSE: AON), a leading global professional services firm, launched its casualty sector update  , which reveals that emerging risks in the casualty sector could contribute approximately $5bn of reinsurance premium annually.

The report, developed in collaboration with Moody’s, suggests that emerging risks such as PFAS contamination, addictive software design and microplastics are all reshaping the liability landscape, presenting insurers and reinsurers with challenges and volatility but also with profound opportunities for growth and innovation. Further growth is expected through legacy liability transfers and parametric solutions, whereby proactive insurers can lead in all these areas.

The substantial rise in plaintiff-side litigation, particularly in U.S., has created an environment for significantly increased claims values, where previously improbable lawsuits have become economically viable and frequent. The report highlights that six out of the 13 largest losses in the U.S. P&C industry have been casualty events, with deficient reserving the primary cause of insurer impairment.

Re/insurers that strategically leverage data, analytics, and innovative risk-transfer mechanisms will be best positioned to assess such emerging risk and capitalize on the rise in demand for liability coverage. Supported by the findings of the report, Aon continues to encourage and assist reinsurers to move towards new risks with clarity and confidence, in order to increase value to clients and grow the sector.

To help capture opportunities, Aon and Moody’s have pioneered the development of named peril reinsurance – a strategic innovation that provides explicit coverage for precisely identified and quantified risks. Named peril solutions, unlike broad traditional policies, drive transparency and certainty by covering specific emerging pre-litigation threats, such as microplastics or ultra processed foods.

Amanda Lyons, global product leader at Aon’s Reinsurance Solutions, said: “The casualty catastrophe sector has reached an inflection point, where a structured, scalable market is rapidly emerging. We are not just responding to these market changes – we are developing and implementing advanced solutions in order to proactively shape a scalable, structured market that is poised for substantial growth. Supported by our insights and technology, we are encouraging reinsurers and other capital providers to allocate capacity to these risks and help drive the development of innovative products.”

Joe Melly, Managing Director, Casualty and Financial Lines at Moody’s, said: “We operate in an industry built on an ability to assess and manage risk. Through advanced analytics, AI-enabled casualty catastrophe modeling, and targeted named peril reinsurance products, we are converting emerging casualty exposures into tangible opportunities for re/insurers. This work reflects Moody’s deep commitment to fostering a more sustainable, data-driven, and resilient casualty market.”

To read the full report, The coming casualty catastrophe market could see up to $5 billion in new opportunities, please follow the link: https://www.moodys.com/web/en/us/site-assets/2025-moodys-aon-5b-casualty-market.pdf 

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