The cyber market is benefiting from ample capacity for reinsurance renewals on January 1, 2026, at levels well above those seen just a few years ago, according to reinsurance broker Gallagher Re’s 1st View Renewals report.
Ian Newman, global head of cyber, and Jennifer Braney, head of international cyber, said that while the underlying cyber insurance market continues to see strong growth, this has been offset by stable primary market rates. As a result, reinsurers’ readiness to invest in cyber operations far exceeds insurers’ coverage needs.
Sufficient reinsurance capacity supports higher ceding commissions on quota share treaties and lower risk-adjusted rates on excess loss plans, particularly if the portfolio demonstrates stronger performance. Underperforming treaties were still signed, but on less favorable terms.
The increase in market capacity for excess losses, combined with an interest in reducing ceded profits, drove further structural innovation. However, the pricing of these structures varies widely depending on the risk appetite of each market and the origin of these structures, making marketing a key factor in securing the best terms for each client.
The report shows that network disaster no-loss rate changes range from -15% to -25% at this time of renewal.
The report also noted that the “innovation premium” that insurers have historically paid to enter the cyber catastrophe bond market is steadily declining. These factors ultimately result in an environment where reinsurance supply is abundant but demand is weak or even declining.
“International placements buck the trend, with quota share transfers increasing and demand for non-proportional capacity growing,” Newman and Blaney said in the report. “The international cyber market remains a huge growth opportunity for reinsurers, but they do need to show creativity and flexibility.”
The final months of 2025 saw cloud provider outages disrupting large swaths of the internet, along with several high-profile cyberattacks.
Gallagher Re issued timely reports on these incidents. In some cases, insured losses were relatively small due to the affected companies’ lack of cyber insurance, and in other cases because the outages were resolved quickly and within policy waiting periods. Nonetheless, such incidents help raise awareness of online events and the importance of reporting.
“At the time of the update, reinsurers’ attention was focused on the development of attrition losses from events in the previous year, which, in one or two cases, proved significant – although not enough to undermine overall appetite. Gallagher Re has published an update to our report on claims development patterns,” Newman and Blaney explained.
Despite these challenges, reinsurers maintain a strong interest in supporting the cyber insurance market.
