Insurance Marketplace Realities 2026 – Cyber Risk

Rate predictions: Cyber risk

	Trend	Range
Cyber risk		-5% to +5%

Key takeaway

Given the prolonged period of market stabilization, cyber insurance direct written premiums declined 2.3% in 2024, the first ever decrease in total cyber insurance premiums since the data was first collected in 2015, according to AM Best’s 2025 report. However, demand for cyber insurance has remained strong in the face of an expanding cyber threat landscape.

We are currently seeing flat primary and excess cyber renewals, and capacity continues to be readily available.

• Premium stabilization continued into the third quarter of 2025. While carriers continue to strive for flat rates on all layers, we are still seeing decreases for certain favorable risks. The premium increases we anticipated toward the end of this year have yet to materialize given better than expected loss ratios and intense competition between markets.
• Improvements in cybersecurity practices among policyholders have contributed to reducing vulnerabilities that could lead to losses, thus bolstering insurer results.
• Underwriting decisions are heavily influenced by the security controls a company has in place in conjunction with pricing and attachment points.
• Competition is strong among markets and certain risks may receive multiple quotes. Incumbents are eager to retain business.
• Capacity is plentiful in the market, partially thanks to new facilities able to provide significant excess capacity with flexibility to be deployed anywhere on a program above the primary layer.

We saw a significant increase in average and median ransomware payments in the second quarter of 2025.

• According to Coveware, average ransom payments increased 104% between Q1 and Q2 of 2025, while median ransom payments rose 100% during the same period.
• Publicly disclosed ransomware attacks reached new heights in Q2 2025, with a total of 276 incidents, which represents a 63% increase compared to the same period in 2024.
• In Q2 2025, 1,446 ransomware attacks were not publicly disclosed and were only reported on dark web leak sites, reflecting a 19% increase compared to the same quarter in 2024.

Markets continue to grapple with how to address existing and potential exposures stemming from the use of artificial intelligence and are aggressively underwriting wrongful collection coverage.

• While any coverage assessment for AI risk depends on the specific terms and conditions of any given policy, the general position at present is that traditional insurance policies do not typically affirmatively cover AI risks, but neither do they expressly exclude them.
• We have recently seen the emergence of new insurance products designed specifically to address AI risks not captured under traditional policies, including:

1. Regulatory actions related to AI use
2. Unauthorized use of data or IP in AI models
3. AI hallucination liabilities, among other exposures

• While these products often fill gaps left by traditional policies, they can also overlap with coverage already available in such policies. As such, a thorough gap analysis of an organization’s insurance program is necessary.
• If markets are not satisfied with the answers they receive to wrongful collection underwriting questions, they will broadly exclude coverage for the exposure, including any risks associated with website tracking technology.

Download the full cyber risk report to the right.

Contacts

---

Jason Warmbir

Head of FINEX Cyber & Tech

email Email phone +1 312 607 0096

---

Jason D. Krauss

Cyber/ E&O Thought & Product Coverage Leader, FINEX North America

email Email phone +1 212 915 8374

---