DUAL chief executive Richard Clapham has warned that the global cyber insurance market is approaching a “major inflection point” as continued weakness, increased risk and an intensifying threat landscape combine to test the long-term sustainability of the market.
Cyber insurance has reached a critical juncture, DUAL said in a recent report. As a relatively young category with still-expanding penetration, it has yet to exhibit the cyclical patterns typical of more mature product lines.
“Instead, it has rapidly moved through different phases: early exposure-led growth, a sharp pricing correction and, more recently, sustained weakness,” DUAL explained.
The company noted that 2026 could be a critical year, with signs that the market is approaching a “pricing floor,” particularly in the U.S., which DUAL describes as a traditional bellwether for global pricing trends.
DUAL’s report adds: “Cyber insurance has rapidly moved through different phases: early exposure-led growth, sharp pricing corrections and, more recently, sustained weakness. As pricing continues to decline, risk exposures expand and the cyber threat landscape continues to rise, profitability is gradually eroding. Without changes in underwriting discipline, risks will soften further and corrections will be more severe.”
At the same time, the report highlights that increasing claims severity, broader policy coverage and increasing supply chain risks are leading to a more complex underwriting environment.
“Intense competition has led to lower pricing, expanded product lines and looser terms, resulting in more risks being underwritten at lower premiums. These dynamics have resulted in margin compression across all major geographies,” DUAL said.
The report draws on proprietary insights from the US, Europe, UK and Australia and New Zealand to identify ongoing structural pressures, including ongoing cyber threats, rising risk exposures and early signs of margin compression.
DUAL’s analysis shows that if current trends continue, combined ratios are already deteriorating and could approach unprofitable levels in some markets by 2027.
Richard Clapham, CEO of DUAL, commented: “Cyber insurance continues to play a vital role in protecting against an increasingly complex and interconnected threat environment.
“As the global cyber insurance market approaches a significant inflection point, our DUAL team has developed a global outlook that brings together data-driven trends and the perspectives of our regional cyber experts.”
Ali Khodabakhsh, head of European networks at DUAL, said: “If the market weakness persists, some operators’ margins will come under pressure. There are now two paths to choose from. The first objective is to gradually stabilize prices over the next 12 months, supporting a sustainable and more resilient market. The second objective is for existing weakness to extend into this year and next, increasing the risk of a more severe correction.”
“It is in the interest of customers that the market offers the former. Underwriting expertise, portfolio resilience and long-term relationships will determine which carriers are best positioned to weather the next phase. Those carriers with a proven ability to deliver consistent performance across different pricing environments will be better able to support customers in a more complex risk environment.”
Paul Schiavone, Executive Vice President, Network and Specialty Business, North America, DUAL, said: “Our analysis shows that underlying pressures are building. As the market moves toward a more regulated phase, maintaining long-term capacity and pricing adequacy is critical not only for insurers, but also for insurance’s broader relevance as a risk transfer mechanism.”