Cyber Premiums Are Down 43% Since Late 2023 — Yet Claims Data Point to a Reckoning

Cyber Rates Are Still Falling, Even as Loss Costs Rise

For the third consecutive year, UK cyber insurance buyers are receiving renewal quotes that come in lower than the previous year. According to specialist underwriter DUAL, international cyber rates have fallen by 43% since the fourth quarter of 2023. Lockton's portfolio data shows UK cyber premiums were down by an average of 11% during 2025.

The cause is familiar: aggressive growth targets among London market carriers and a continuing inflow of new capacity. Lockton counted two new managing general agents and a syndicate launching cyber books in the first quarter of 2026 alone. Ethan Godlieb, associate partner for cyber and fintech at Consilium Insurance Brokers, estimates the market has now recorded roughly 12 consecutive quarters of price reductions.

Yet the underlying claims picture is moving the other way. At-Bay found that the average ransomware claim rose 16% year-on-year to $508,000 in 2025, while Coalition put the average ransom demand above $1 million, up 47% over the same period. Ratings agency S&P Global has forecast a 15-20% premium increase across the market this year as claims severity finally catches up with pricing.

No panellist on Insurance Business TV's cyber discussion was ready to predict an immediate hard market, but the central question among brokers is how long the current soft cycle can continue before underwriting results force a correction.

Why London Brokers Doubt the Soft Market Can Last

DUAL and Lockton see a market heading toward a turning point

DUAL's 43% rate fall since late 2023 is not paired with an improving loss picture. On the contrary, the underwriter says claims severity is climbing even as premiums keep sliding, and it describes 2026 as a critical turning point. Lockton's portfolio data tells the same sales-side story: premiums down 11% on average in 2025, with further cuts expected through at least the first half of 2026 because London market carriers are chasing growth targets and new capacity keeps arriving.

Why severity is catching up with premiums

The strain is already visible in claims data. At-Bay recorded a 16% year-on-year rise in the average ransomware claim to $508,000 in 2025, and Coalition put the average ransom demand above $1 million, up 47%. S&P Global has responded by forecasting a 15-20% premium increase across the market this year. If that forecast is accurate, the London market's continued price cuts would be running directly against the direction of loss costs. DUAL says that dynamic is already reflected in deteriorating combined ratios across the US, UK, Europe and Australia/New Zealand, with some books at risk of unprofitability by 2027. Daniel Winn of Jensten London Markets adds that frequency, not just severity, is the thing to watch.

Colin Fox's US bellwether warning

The most sceptical panellist about the current soft cycle is Colin Fox, cyber insurance consultant at Integrity, part of Hayes Parsons. He argues the market is not sustainable and points to the 2020-21 hard market, when rates jumped by 100-150% almost overnight. The expected pendulum swing back has not followed the same timetable. Fox says early hardening signals in the US, historically the bellwether for London, could feed into UK pricing within six to twelve months, although he stops short of naming a precise turning point.

The longer-tail argument and the under-penetration debate

Other panellists offer reasons the day of reckoning could be delayed. Consilium's Ethan Godlieb notes that cyber has a longer liability tail: the full claims picture from current underwriting years often does not emerge for two or three years, so today's pricing can look fine right up until it does not. Daniel Winn frames the soft market as a fight for the minority of UK SMEs that buy cyber cover, with uptake commonly cited at around 40% against 63% for medium-sized firms and roughly 70% for FTSE 100 companies, rather than a giveaway to existing clients. Selorm Kofi Domeh of Talbot Jones argues a profitable book and healthy competition could keep current pricing intact, with buyers who could not afford cover two or three years ago now able to enter the market.

What Buyers and Brokers Should Do While the Soft Market Holds

For buyers, the current market still offers leverage, but the data suggests the window is finite.

• Lock in favourable terms while they remain available. Lockton expects further premium reductions through at least the first half of 2026, but Colin Fox's US hardening signal suggests UK pricing may respond within six to twelve months.
• Use lower premiums to strengthen cover, not just cut costs. With Coalition reporting average ransom demands above $1 million, buyers can apply the savings from three years of falling rates to higher limits or broader coverage rather than banking the price reduction alone.
• Treat US cyber pricing as the leading indicator for London renewals. If S&P Global's forecast 15-20% market-wide premium increase materialises, London market clients could face a faster repricing than recent renewal experience would suggest.
• For brokers, test renewals against DUAL's combined ratio warning. DUAL reports deterioration across the US, UK, Europe and Australia/New Zealand, with some books at risk of unprofitability by 2027, a signal that quoted reductions may not reflect the true cost of risk.
• For SME buyers, do not assume the current price is permanent. UK SME uptake remains around 40%, which is driving competition now, but that same under-penetration argument can reverse once insurers stop chasing growth and start protecting profitability.