US cyber insurance pricing is showing signs of stabilization after four years of rate reductions, although developing liability claims and faster vulnerability discovery could influence underwriting profitability and reinsurance demand, according to Howden Re.
Cyber insurance rates continue to soften, but the pace of reductions has slowed considerably. Its 2026 pricing forecast anticipated a 4.9% decline, close to the actual reduction of 5.4%.
This contrasts with the period between 2023 and 2025, when the difference between projected and actual rate changes exceeded eight percentage points. However, pricing trends differ significantly between the United States and international markets.
Key Highlights
- Cyber insurance rates continue to decline, but the pace of softening has slowed. US pricing has fallen 9.7% since early 2024, compared with 24.5% across international markets.
- Cyber claims from the 2023 underwriting year remain under development, particularly US privacy and data breach litigation, while newly recorded vulnerabilities increased 105% in the first nine months of 2026.
- Cyber reinsurance quota share cessions averaged 47.1% at July renewals, while aggregate stop-loss pricing declined, with average rate on line reaching 7.23%.
The US cyber insurance market returned to growth in 2025-2026, with total direct written premiums reaching approximately $9.46 bn, up 3.5% from $9.14 bn in 2024, according to data published by the National Association of Insurance Commissioners (NAIC).
The recovery followed the market’s first recorded premium contraction in 2024, as competition and expanding underwriting capacity continued to influence pricing.
Claims trends were less uniform, with large businesses experiencing substantially higher losses despite fewer reported claims. Between 2017 and 2022, the cyber market expanded at an impressive 32% annual rate. Global premiums doubled from 2017 to 2020 and then doubled again from 2020 to 2022, with projections initially anticipating this robust growth to continue.
US cyber insurance rates fall 9.7% since 2024
Howden Re estimates that US cyber insurance rates have declined 9.7% since the beginning of 2024. Across markets outside the United States, prices have fallen 24.5% over the same period.
International competition has intensified as insurers pursue growth in markets with relatively low cyber insurance penetration and more favorable claims experience.
The closer alignment between expected and actual pricing changes indicates greater market stability. However, underwriting performance remains uneven (see 2026 Outlook for Global Cyber Insurance Segment).
Unlike the market-wide deterioration experienced around 2019, emerging pressures associated with the 2023 underwriting year appear more concentrated in particular portfolios.
Cyber insurance and reinsurance market indicators
| Indicator | Latest figure |
|---|---|
| 2026 cyber rate forecast | -4.9% |
| Actual 2026 rate change | -5.4% |
| US cyber rate change since early 2024 | -9.7% |
| Rest-of-world rate change since early 2024 | -24.5% |
| Increase in recorded vulnerabilities, Jan–Sep 2026 | +105% |
| Average cyber quota share cession | 47.1% |
| Average aggregate stop-loss attachment point | 108% |
| Average aggregate stop-loss rate on line | 7.23% |
| Risk-adjusted stop-loss rate reductions | Approaching 20% |
Cyber claims from the 2023 underwriting year continue to develop
The 2023 underwriting year remains an area of concern, particularly in the United States. Privacy and data breach litigation has expanded beyond large corporations, with smaller businesses increasingly facing claims previously associated with major enterprises.
These third-party liability claims often develop more slowly than ransomware losses, which contributed to the sharp tightening of cyber insurance pricing between 2019 and 2021.
Howden Re’s Cygenesis research compares this development with historical experience in directors and officers (D&O) insurance, where long-tail claims deterioration became visible only gradually.
Privacy litigation has moved steadily into smaller segments of the US market. The eventual effect on underwriting profitability will depend on individual insurers’ portfolio composition, insured demographics and exposure to litigation.
US vs. International Cyber Insurance Pricing Trends
| Market indicator | United States | Rest of World |
|---|---|---|
| Rate change since January 2024 | -9.7% | -24.5% |
| Pace of rate reductions | Slowing | More pronounced |
| Competitive environment | Increasingly stable pricing | Stronger competition |
| Claims development | Privacy and data breach litigation remains a concern | More favorable loss environment |
| Insurance penetration | More mature market | Lower penetration creates growth opportunities |
| Underwriting considerations | Long-tail liability claims and portfolio composition | Pricing adequacy and expansion into underserved markets |
| Reinsurance implications | Monitoring claims deterioration and retention levels | Supporting growth and portfolio diversification |
Howden Re also sees opportunities for insurers to expand cyber coverage through technology-enabled distribution and partnerships, potentially improving portfolio diversification.
Cyber vulnerabilities increase 105% in 9M 2026
The number of vulnerabilities added to the MITRE vulnerability database between January and September 2026 increased 105% compared with the corresponding period in 2025.
Howden Re attributes part of the acceleration in vulnerability discovery to AI-assisted tools. However, identifying more vulnerabilities does not necessarily translate into a proportional increase in successful cyberattacks or insured losses.
The broker’s first-half 2026 Cyber Watch research found that known exploited vulnerabilities were not increasing at the same pace as newly identified security flaws.
Although exploitation activity accelerated during the second half of the year, known exploited vulnerabilities still represented less than 0.5% of all recorded vulnerabilities.
Security controls remain important in preventing exploited vulnerabilities from generating insurance claims.
Network segmentation, application allow-listing and access controls can limit the consequences of successful exploitation.
Reinsurers expect faster vulnerability discovery and exploitation to create potential pressure on claims frequency, depending on how effectively insured organizations respond.
The broker recommends monitoring indicators such as the US Cybersecurity and Infrastructure Security Agency’s Known Exploited Vulnerabilities catalogue when assessing emerging cyber threats.
Cyber reinsurance quota share cessions stabilize at 47.1%
Cyber reinsurance purchasing patterns are also changing as the market approaches January 1, 2027 renewals. Howden Re’s placement data indicates that the multi-year decline in quota share cessions has slowed.
The weighted average cession for placements effective July 1, 2026, was 47.1%, down 1.5 percentage points year over year. Early indicators suggest the downward trend could reverse in 2027, particularly on a weighted-average basis.
Primary insurers continue to adjust the balance between proportional and non-proportional reinsurance according to their risk appetite, portfolio performance and growth objectives.
The January renewal season will provide further evidence of whether cedents intend to retain more cyber risk or increase their use of quota share protection.
Cyber Reinsurance Market: July 2026 Renewals vs. 2025
| Reinsurance metric | July 2026 | Change vs. 2025 |
|---|---|---|
| Weighted average quota share cession | 47.1% | -1.5 percentage points |
| Aggregate stop-loss attachment point | 108% | -8 percentage points |
| Aggregate stop-loss rate on line | 7.23% | Declined; exact change not disclosed |
| Risk-adjusted stop-loss pricing | — | Reductions approaching 20% |
| Quota share cession trend | Decline slowing | Early signs of potential reversal in 2027 |
| Non-proportional reinsurance conditions | Favorable to buyers | Supported by relatively benign catastrophe losses |
| Cyber reinsurance capacity concentration | Top 10 reinsurers provide approximately 87% | Historical comparison not disclosed |
Cyber stop-loss reinsurance pricing declines nearly 20%
Relatively benign catastrophe loss experience has supported favorable conditions for buyers of non-proportional cyber reinsurance.
At mid-year 2026 renewals, aggregate stop-loss attachment points averaged 108% of underlying limits, eight percentage points below the 2025 level. The average rate on line declined to 7.23%, with risk-adjusted pricing reductions approaching 20%.
Despite competitive conditions, Howden Re warns that systemic cyber events remain a significant exposure.
Organizations increasingly rely on shared cloud infrastructure, technology providers and interconnected applications, creating the potential for losses to affect multiple insured businesses simultaneously.
The concentration of reinsurance capacity also remains relevant. Howden Re estimates that the ten largest cyber reinsurers provide approximately 87% of market capacity.
A major cyber loss event comparable in impact to a moderate property catastrophe year could materially affect pricing and available capacity.
January 2027 cyber reinsurance renewals face competing pressures
Cyber reinsurance decisions at January renewals to reflect both the current competitive environment and uncertainty surrounding future claims. For cedents, lower reinsurance pricing creates opportunities to reassess retention levels and protection structures.
However, developing privacy litigation, faster vulnerability exploitation and systemic technology dependencies could affect profitability over time.
The broker argues that insurers and reinsurers should evaluate these risks alongside current pricing conditions rather than relying exclusively on recent claims experience.
The extent of deterioration in the 2023 underwriting year and the evolution of cyberattack frequency will be important factors in determining whether market stabilization continues into 2027.
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EXPERTS: Luke Foord-Kelcey – Global Head of Cyber at Howden Re, Harriet Gruen – Head of Cyber Threat Intelligence at Howden Re, Michael Giuliano – Director at Howden Re
by Peter Sonner, Lead Tech Editor at Beinsure
