US Cyber Insurance Rates Decrease: Market Trends and Insights
The US cyber insurance market has continued to see decreases in rates, though current trends suggest these reductions may soon taper off.
According to Marsh's recent data, cyber insurance rates in the United States fell by 2% in the second quarter of 2026, mirroring the trends from earlier this year. The declines have been consistent since the second quarter of 2023, and insurer capacity has remained stable, despite industry consolidation. Marsh indicates that brokers hoping to secure further reductions need to investigate a wider array of market options, highlighting an evolving strategy in navigating this competitive landscape.
Market Dynamics and Competition
Michael Spinks, CFC's head of SME cyber in the USA, remarked on the market's current trajectory, suggesting that cyber insurance rates are nearing the bottom of their cycle. He described the market's softening over the past few years as a response to the ransomware-driven hard market conditions from 2020 to 2022. According to Spinks, while ransomware remains a prominent threat, heightened competition and increased market capacity have brought rates down to pre-2020 levels. This trend is corroborated by data from Aon, which reported over 90 insurers competing in cyber placements in 2025, resulting in average rate reductions of 4% to 7% across North America.
Insurance Industry Insights
The evolving market conditions reflect broader industry trends as well. In 2025, 19% of US clients purchasing cyber liability coverage sought additional limits, aiming to bolster their programs beyond just achieving premium savings. However, recent underwriting developments have spurred insurers to reevaluate pricing strategies. AM Best noted a rise in the US cyber insurance loss ratio, increasing by 4.3 percentage points to 53% in 2025. This marks the second consecutive increase, pushing the ratio above 50% for the first time since the ransomware surge during the pandemic. Surplus lines insurers, especially, witnessed higher loss ratios compared to admitted carriers.
Differentiated Rate Adequacy
Rate adequacy varies significantly across different industries, as noted by Spinks. Some sectors in the US may necessitate additional rate adjustments to align with exposure levels, while others may not require such changes. Keith Savino, CEO of Emergence US, observed that the cyber insurance market's growth mimics patterns seen in the broader property and casualty sectors. Despite this growth, a substantial portion of businesses remains uninsured. A Morning Consult survey found that only 24% of US small-business owners possess cyber insurance, indicating ripe opportunities in this sector.
| Market Trend | Explanation |
|---|---|
| Rate Reductions | 2% decrease in Q2 2026 consistent declines since 2023 |
| Increased Capacity | Stable insurer capacity despite consolidation |
| Rising Competition | More than 90 insurers in 2025 fierce competition keeps rates low |
Emerging Priorities for Coverage
As pricing dynamics make coverage more attainable for smaller enterprises, there is a significant emphasis on evaluating the quality of coverage offered. Brokers are encouraged to scrutinize insurers’ policies, especially concerning the governance of AI technologies. With AI playing an increasingly prominent role in assessing risks and responses, insurers are paying closer attention to their clients’ AI usage strategies and related risk management approaches.
Spinks underscores the multifaceted role of effective cyber insurance, which should prioritize not only claim responses but also embrace threat prevention and proactive risk management. This approach reflects the current push towards comprehensive coverage in an ever-evolving digital landscape, as brokers and clients align their strategies with emerging threats and technological advancements.