Morningstar DBRS said that while rising geopolitical tensions stemming from the Iran conflict are expected to drive increased cyber activity and strengthen demand for insurance protection, the weak market evidenced by slower cyber premium growth in recent years is likely to persist unless major cyber loss events materially reset expectations for future claims.
A new report from the company shows that the escalation of conflict in the Middle East has intensified state-affiliated and proxy cyber activities, exacerbating global cyber risks, while also reporting incidents affecting commercial entities, including the publicly disclosed attack on Stryker Corporation in March 2026.
“Although intense hostilities between the United States and Iran have paused at the time of this writing, cyberattacks are likely to persist or even intensify given their relatively low cost, ease of deployment, and challenges in determining attribution,” the Morningstar DBRS report states.
Elsewhere in the report, the company noted that after several years of rapid expansion, the global cyber insurance market has entered a period of moderate growth, with lower prices in most regions.
The shift was reportedly driven by increased competition in the market due to low insured losses, tighter terms and ample insurance and reinsurance capacity.
“The cyber insurance market is characterized by substantial risk sharing, with reinsurers typically bearing a significant portion of overall risk, reflecting ongoing uncertainty about the frequency and severity of losses. With no major systemic cyber loss events since 2023, insurers have gained greater confidence in recent years and have been able to retain a greater share of risk,” Morningstar DBRS said.
According to the report, the April 2026 cyber reinsurance renewal season reflects these conditions, with rates reduced by approximately 30% in the U.S. market, supported by stable performance and lower tail risk pricing.
Morningstar DBRS continued: “While the latest consolidated data for the cyber insurance industry is limited, insurer profitability has been strong, with average combined ratios expected to be around 70% in 2024, driven in part by insurers’ enhanced risk controls, such as widespread adoption of multi-factor authentication and secure offline backup arrangements.
“While geopolitical tensions have heightened tail risks and systemic uncertainty, the fundamentals of the cyber insurance industry remain resilient, underpinned by disciplined underwriting, lower insured losses and ample capacity.”
