The cyber market benefited from more-than-adequate capacity at the January 1st, 2026, reinsurance renewals, with levels far exceeding those available a few years ago, according to reinsurance broker Gallagher Re’s 1st View renewal report.
Ian Newman, Global Head of Cyber, and Jennifer Braney, Head of International Cyber, said that while the underlying cyber insurance market continues to grow strongly, this has been offset by stabilising primary market rates. Reinsurers’ readiness to put capacity behind cyber business has therefore run ahead of insurers’ need for coverage.
Ample reinsurance capacity supported higher ceding commissions on quota share treaties and risk-adjusted rate reductions on excess of loss programmes, particularly where portfolios demonstrated stronger performance. Underperforming treaties were still placed, but on less favourable terms.
Increased capacity in the excess of loss market, alongside cedant appetite for reducing ceded margin, has driven further structural innovation. However, pricing for these structures varied widely depending on each market’s risk appetite and the nascence of these structures, making marketing a key factor in securing the best terms for each client.
The report revealed that cyber catastrophe loss-free rate changes ranged from -15% to -25% at this renewal.
The report also noted that the “innovation premium” insurers have historically paid to access the cyber catastrophe bond market is steadily eroding. These factors ultimately led to an environment of abundant reinsurance supply facing subdued, if not declining, demand.
“International placements bucked the overall trend, with growing quota share cessions and increased demand for non-proportional capacity. The international cyber market remains a substantial growth opportunity for reinsurers, but they do need to show both creativity and flexibility,” Newman and Braney said in the report.
In the latter months of 2025, outage events at cloud providers disrupted large swathes of the internet, alongside several high-profile cyberattacks during the year.
Gallagher Re issued timely reports on these events. Insurance losses were relatively minimal in some cases due to a lack of cyber insurance at impacted companies, and in others because disruptions were resolved quickly and fell within policy waiting periods. Nevertheless, such events have helped to raise awareness of cyber incidents and the importance of coverage.
“At the renewal, reinsurers’ attention focused on attritional loss development from prior-year events, which has proved to be material in one or two cases – though not enough to derail overall appetite. Gallagher Re issued an update to our report on claims development patterns,” Newman and Braney explained.
Despite these challenges, reinsurers maintained a strong appetite for supporting the cyber insurance market.
