Global reinsurance brokerage and advisory firm Gallagher Re observed that oversupply of capacity resulted in a -32% change in the network’s total excess losses (XOL) risk adjustment ratio (RAR) on January 1, 2026.
The data comes from the latest version of the firm’s Cyber ​​Rate Index, an update to the Cyber ​​RAR Index due out in 2025, which tracks reinsurance pricing adjusted for expected changes in underlying risk levels.
The index leverages Gallagher Re’s proprietary risk view, specifically taking into account the network’s total stop loss and pricing changes for the XOL contract on January 1, 2026.
The reasons for this, Gallagher Re explained, are that since their introduction in 2015, aggregate stop-loss and XOL structures have become the preferred non-proportional solution for most cyber reinsurance buyers, and the aggregate market remains the most well-capitalized segment of the non-proportional cyber reinsurance industry, showing minimal pricing differences between market participants, making it the most appropriate basis for an industry-wide pricing index.
The company continued that buyers of network-aggregated XOL reinsurance also benefited from improvements in structural terms and pricing as of January 1, 2026.
“For example, many buyers are seeing a reduction in attachment points at renewal time. This dynamic is consistent with expectations that underlying (primary) network rates are expected to continue to weaken in 2026,” Gallagher Re said.
Ian Newman, global head of cyber at Gallagher Re, commented: “Reinsurance buyers continue to look for suitable and effectively priced non-proportional cyber protection.
“Carefully designed aggregated products provide the best solution for those ceders seeking asymmetric protection against highly adverse loss trends (such as the rise of ransomware from 2018 to 2021), the frequency of event losses, and/or a single catastrophic or systemic event.
“As a result, Gallagher Re believes that, over the longer term, the Cyber ​​Composite XOL Market Index will provide a useful and insightful barometer of the state of the cyber reinsurance ratings environment.”
