Gallagher Re has published the latest edition of its cyber rate index, reporting that excess capacity in the market led to a -32% risk-adjusted rate change for cyber aggregate excess of loss contracts at the January 1, 2026 renewals.
The sharp decline follows a year of buyer-favorable conditions. Global cyber insurance rates fell 7% in the second quarter of 2025, according to Marsh's global insurance market index. Expanded reinsurance capacity accelerated pricing softness across multiple lines heading into the 2026 renewal season.
The index is an updated version of the firm's Cyber RAR index, which launched in 2025 to track reinsurance pricing adjusted for anticipated changes in underlying risk levels.
The methodology differs from property reinsurance, where limit correlates directly with risk. Gallagher Re's cyber index instead relies on its proprietary view of risk, which factors in underlying rate changes, loss trends, volatility parameters, and catastrophe model selection.
The index focuses on cyber aggregate stop-loss and excess of loss contracts – structures that protect insurers when cumulative losses over a policy year exceed a set threshold. Since their introduction in 2015, these have become the predominant non-proportional option for cyber reinsurance buyers.
Ian Newman (pictured above), global head of cyber for Gallagher Re, said reinsurance buyers continue to seek non-proportional cyber protection that is both suitable and cost-effective.
Beyond pricing, buyers of cyber aggregate excess of loss reinsurance also secured improvements in structural terms during the renewal period. Many cedants obtained reductions in attachment points – the loss thresholds that trigger reinsurance coverage – according to the firm.
These developments come as primary cyber insurance rates are expected to continue softening throughout 2026.
Despite near-term pricing pressures, Gallagher's 2026 Cyber Insurance Market Outlook projects the global market could reach US$30–50 billion by 2030. The firm estimates the market at US$16–20 billion in 2025, with North America holding 60–70% of global premiums.
Gallagher's outlook also noted that ransom payment rates declined to 28–32% in 2025, down from 37% in 2024, reflecting improved risk management among policyholders.
Market participants remain watchful for potential rate-hardening catalysts. According to Coalition, cyber risk in 2026 will be defined less by isolated breaches and more by hidden interdependencies that drive correlated, systemic losses.
Events such as the CrowdStrike and AWS outages in recent years highlight how businesses remain exposed when they lack multi-cloud strategies, Coalition said.
Analysts from S&P Global Ratings predict annual premium increases of 15–20 % per year through 2026, driven by reinsurance costs and rising claim severities from incident response and legal expenses.
"Gallagher Re therefore believes that over the long-term, an index of the cyber aggregate XOL market will provide a useful and insightful barometer as to the state of the cyber reinsurance rating environment," Newman said.
