Richard Clapham, CEO of DUAL, has warned that the global cyber insurance market is approaching a “significant inflection point”, as sustained softening, rising exposures and an increasingly elevated threat landscape converge to test long-term market sustainability.
In a recent report, DUAL said cyber insurance has reached a critical juncture. As a relatively young class with still-expanding penetration, it has “yet to exhibit” the cyclical patterns typical of more mature lines.
“Instead, it has moved rapidly through distinct phases: early exposure-led growth, a sharp pricing correction and, more recently, sustained softening,” DUAL explained.
The firm noted that 2026 is likely to be a pivotal year, with indications that the market is nearing a “pricing floor”, particularly in the United States, which DUAL described as a traditional bellwether for global pricing trends.
“Cyber insurance has moved rapidly through distinct phases: early exposure-led growth, a sharp pricing correction and, more recently, sustained softening. With pricing continuing to decline, exposures expanding, and the cyber threat landscape remaining elevated, profitability is being eroded gradually. Without a shift in underwriting discipline, further softening risks, a more severe correction,” DUAL’s report added.
At the same time, the report highlighted that increasing claims severity, broader policy coverage and growing supply chain exposures are contributing to a more complex underwriting environment.
“Intensified competition is leading to lower pricing, larger line sizes and looser terms, resulting in more risk being underwritten for less premium. These dynamics are contributing to margin compression across all major regions,” DUAL said.
Drawing on proprietary insights across the US, Europe, the UK and Australia and New Zealand, the report identified consistent structural pressures, including persistent cyber threats, rising exposures and early signs of margin compression.
DUAL’s analysis suggests combined ratios are already deteriorating and could approach unprofitable levels in some markets by 2027 if current trends continue.
Richard Clapham, CEO, DUAL, commented, “Cyber insurance continues to play a vital role in enabling resilience against an increasingly complex and interconnected threat landscape.
“With the global cyber insurance market approaching a significant inflection point, our DUAL team has developed a global outlook that brings together data driven trends and perspectives from our regional cyber experts.”
Ali Khodabakhsh, Head of Cyber, Europe, DUAL, said, “Margins will come under pressure for some carriers if market softening persists. Two paths now lie ahead. The first leads to gradual price stabilisation over the next 12 months, supporting a sustainable and more resilient market. The second sees existing soft conditions extend into this year and next, increasing the risk of a more severe correction.”
“It is in clients’ interests that the market delivers the former. Underwriting expertise, portfolio resilience and long-standing relationships will determine which carriers are best positioned to navigate the next phase. Those with a proven ability to deliver consistent performance through different pricing environments will be better placed to support clients in a more complex risk environment.”
Paul Schiavone, Executive Vice President, Cyber and Professional Lines, DUAL North America, noted, “Our analysis shows that underlying pressures are building. As the market moves towards a more disciplined phase, sustaining long-term capacity and pricing adequacy will be essential not only for insurers, but for the broader relevance of insurance as a mechanism for risk transfer.”
