US cyber reinsurance rates fell around 32% during the April 1 renewals, impacted by a surge in excess capacity, which combined with a stable performance and low non-proportional pricing, has fostered the development of tailored solutions for cyber portfolios, according to Gallagher Re’s 1st View April renewal report
While primary rates for most US cyber carriers remain flat or negative, the reinsurance broker notes that lead insurers in the large corporates and the small and medium-sized enterprise (SME) sector are beginning to mark a shift, with rates expected to stabilise and potentially increase in late 2026.
In the report, James Dominguez, Senior Vice President – Cyber Reinsurance Broker, North America, noted that penetration rates are increasing within the SME sector.
This indicates that aggregate deployed limits are up year-over-year, a growth largely offset by rate reductions. Some rate stabilising should lead to GWP growth, it was stated.
Moreover, reinsurers maintain a strong appetite for cyber risk, supported by a continued surplus of capacity to meet demand. Average market cessions have remained stable year-on-year, with Gallagher Re observing a 39% average through the first quarter renewals, down slightly from 40% in 2025.
Reinsurance pricing has softened due to an excess of capacity, a trend the firm expects to continue through 2026. Non-proportional placements have seen a particularly significant average risk-adjusted decrease of roughly 32%, according to Gallagher Re’s analysis.
“The combination of abundant reinsurance capacity, stable performance, and low non-proportional pricing has driven the development of bespoke solutions for cyber portfolios,” Dominguez stated.
The market remains cautious due to geopolitical tensions in the Middle East. While early 2026 has experienced a relative lack of significant cyber events, compared to several high-profile events in 2025, the conflict in the region has become a focal point for risk managers.
“We may yet see an impact on the market from recent geopolitical events in the Middle East. As a result it remains uncertain how the US cyber market will grow this year,” said Dominguez.
Additionally, the Stryker wiperware incident has raised significant concerns regarding US contract war exclusions and their potential implications.
As a result, Gallagher Re emphasises that North American carriers and reinsurers are closely monitoring the US-Iran conflict and its potential impact on insurance policies, particularly regarding war exclusions and potential “Nation State” activities.
While the most significant movement for US Cyber was a 32% decrease in catastrophe loss-free pricing, pro rata commissions saw a modest 1% increase.
Gallagher’s report also covers the Japanese cyber sector, witch continues to grow at 10% year-on-year, driven by SME and personal segments, with stable original rates and increasing demand for risks XL programmes.
However, Osamu Asari, Executive Director, International Cyber, noted that “the pace of growth has slowed compared to previous years.”
Although there were a few notable individual losses over the last year, such as the Asahi Group ransomware incident in September 2025, the overall effect on treaty results has been minor.
Unlike other mature markets, Japan’s original rates have been consistent in recent years and are anticipated to stay that way in the upcoming year, according to the broker.
