Guides
The cyber insurance market: capacity, pricing and appetite
Where cyber pricing, capacity and carrier appetite stand in October 2026: rates still falling, loss ratios rising, Zurich now owning Beazley, and what to do.
As of October 2026 cyber insurance is still a buyer's market on price and capacity, but the underwriting results behind it are getting worse. Marsh reported on July 23, 2026 that U.S. cyber rates fell 2% in the second quarter and global cyber rates fell 4%, the twelfth straight quarterly decline. At the same time AM Best put the 2025 industry loss ratio at 53, the first reading above 50 since the ransomware surge, and Beazley, one of the largest cyber writers, said competition had pushed some prices below what the risk justifies. Take the lower prices and broader terms while they last, and read the schedule closely, because carriers are tightening through exclusions and sublimits more than through headline rate.
Where pricing stands
| Indicator | Reading | Source |
|---|---|---|
| U.S. cyber rates, Q2 2026 | Down 2% | Marsh Global Insurance Market Index, July 23, 2026 |
| Global cyber rates, Q2 2026 | Down 4%, twelfth consecutive quarterly decline; down 5% in Q1 | Same |
| For contrast, U.S. casualty rates, Q2 2026 | Up 7% | Same |
| For contrast, U.S. property rates, Q2 2026 | Down 13% | Same |
| Pricing cuts in the U.S. | Eighth consecutive quarter through Q1 2026, steepest in Q4 2025 and Q1 2026 | AM Best, via Risk & Insurance, July 10, 2026 |
| Global rates versus the mid-2022 peak | Down 22% | Howden, as cited in the NAIC's 2025 cyber report |
The 2026 Marsh index shows cyber moving with property rather than casualty. Property fell 13% in the U.S., while casualty rose 7%. Cyber pricing has been a soft market for years, which is the opposite of the 2020 to 2022 hard market when premiums rose sharply. hard and soft insurance markets: what the cycle means for buyers explains the cycle.
How big the market is and who writes it
The NAIC's 2025 report on the cybersecurity insurance market, using 2024 data, counted about $9.14 billion of U.S. direct written premium including alien surplus lines, down 7% from $9.84 billion in 2023, the first decline since the NAIC began collecting the data. U.S.-domiciled insurers wrote $7.08 billion of that. Policies in force were 4,368,614 and the number of claims rose almost 40% to nearly 50,000.
AM Best's mid-2026 market report, as covered by Risk & Insurance, put 2025 total cyber direct premium at $7.5 billion against $7.1 billion in 2024, but said the gain was largely because Beazley moved a block of business from an offshore entity to a U.S. company. Insurance Journal's June 30, 2026 report said premium was basically flat after adjusting for that. Our reading is that AM Best's $7.1 billion for 2024 is close to the NAIC's $7.08 billion for U.S.-domiciled carriers, so the two sources are measuring roughly the same thing, while the NAIC's $9.14 billion adds the alien surplus lines market.
More details from AM Best:
- Surplus lines write nearly two-thirds of cyber premium. That means most buyers of standalone cyber policies are dealing with a non-admitted insurer. See wholesale brokers and surplus lines placement: how hard risks get insured.
- Primary policies and endorsements are different products. Endorsements to other commercial policies were more than 2.5 million of roughly 4.7 million policies in force, and primary cyber policies produced over 60% of premium, at an average premium of $2,287 per primary policy against $151 per endorsement. The averages describe the whole market, not what a given business will pay.
- Chubb was the largest writer by premium, at $629.2 million, with Beazley second at $571 million. Hartford Insurance Group led by policy count.
Loss results: why the soft market may not last
AM Best said the 2025 loss ratio rose for the second straight year to 53, the first time above 50 since the COVID-era ransomware spike. Surplus lines carriers ran at 55.9 against 50.2 for admitted carriers. Third-party claims grew about 30% for the market in 2025 (nearly 40% for surplus lines and 12% for admitted carriers), and those claims have a longer tail, which adds uncertainty to reserves. AM Best warned that reversing the loss ratio trend will be difficult while pricing stays under pressure.
For a buyer the practical point is this: a loss ratio of 53 generally still leaves room for profit once expenses are added, which is one reason capacity has stayed. The risk is the direction. Rates have fallen for two years while third-party claims are growing, and the lag between pricing and loss development is how cycles turn. what drives the cost of cyber insurance covers the pricing inputs you control.
Capacity: reinsurers and capital markets
Primary cyber insurers rely on reinsurance. The NAIC report notes that roughly half to two-thirds of global cyber premium was ceded to reinsurers in 2022 and that the top five reinsurers write about 62% of cyber gross written premium, the top ten about 87%, so a few reinsurers set how much capacity is available.
Howden Re reported on January 19, 2026 that early-2026 cyber reinsurance renewals favored insurers: quota share ceding commissions rose 1% to 1.5% and now sit mostly in the mid-30s percent range, and excess-of-loss stop-loss pricing fell 15% to 20% after a loss-free year. It also said plentiful capacity and strong reinsurer appetite favored the buyers of reinsurance. New reinsurers entered in January 2025 with $250 million of capacity and, Howden said, most missed their deployment targets and reloaded for 2026.
Beyond traditional reinsurance, the NAIC report describes vendor-backed cyber warranties, parametric covers and cyber catastrophe bonds, the first dedicated one issued in 2023. These are small compared with the main market. See systemic cyber risk and cyber catastrophe bonds.
Carrier appetite and consolidation
Two moves in 2026 matter.
- Zurich completed its acquisition of Beazley on October 1, 2026, valuing the Lloyd's insurer at £8.1 billion ($10.7 billion), according to Insurance Journal. Risk & Insurance, covering AM Best's report, noted the deal would make Zurich the top cyber insurer by 2025 direct premium. It is too early to say what changes for Beazley policyholders, so ask your broker at renewal.
- Beazley said cyber had become too cheap. In its first-half 2026 results, covered by Insurance Business on August 5, 2026, Beazley said competition had pushed some rates below what the risk justifies, and it is shrinking its U.S. cyber book (about 9% of its portfolio) and shifting growth to Bermuda. Its pre-tax profit fell 53% to $237.7 million. Insurance Business reported in January 2026 that it had already scaled back some cyber writings as rates softened.
Elsewhere, managing general agents and insurtechs (Coalition, At-Bay, Cowbell) compete for small and mid-size accounts with scan-based underwriting and bundled security services. Appetite differs by carrier and by class of business, so ask your broker which markets actively want your industry. underwriting appetite: why one insurer wants you and another doesn't explains the logic.
Terms are moving even as price falls
Pricing does not tell the whole story. Chubb's widespread event and neglected software endorsements (described in its October 2021 product sheet), Beazley's catastrophic cyber event sublimit (2023 wording) and the web tracking exclusions Bloomberg Government reported in September 2025 all limit recovery regardless of premium. common cyber insurance exclusions covers them. Meanwhile, controls requirements remain firm; MFA, EDR and backups: the controls cyber insurers now require has the list.
A hypothetical renewal
Say a 120-person manufacturer in Ohio has a $2 million cyber limit and receives a renewal offer at a slightly lower premium. This is invented to show the decision, not a market price.
- Ask the broker to market the account to both admitted and surplus lines carriers, and to show the same limit with a lower retention.
- Compare the ransomware sublimit and coinsurance against last year, and check whether a widespread event or neglected software term has been added.
- Ask for a quote on a higher limit, since price rises more slowly than limit.
- Confirm the carrier's AM Best rating, because a surplus lines policy is not protected by state guaranty funds the way an admitted one is.
- Keep application answers current, since the controls questions matter as much as the price.
The outcome to aim for is broader terms at flat spending, not the lowest premium on a narrower form.
Key takeaways
- U.S. cyber rates were down 2% in Q2 2026 (global down 4%, the twelfth straight quarterly decline), according to Marsh, so buyers have leverage on price and structure.
- AM Best put the 2025 loss ratio at 53, the first reading above 50 since the ransomware spike, and third-party claims grew about 30%. The soft market is on borrowed time.
- Surplus lines carriers write nearly two-thirds of cyber premium, so check admitted status, taxes and guaranty fund limits.
- Zurich closed its acquisition of Beazley on October 1, 2026, and Beazley itself said cyber had become too cheap.
- Use the leverage to buy broader terms, not just a lower premium, and watch for new sublimits and exclusions.