Cyber Premiums Fall for First Time as Pricing Pressures Mount

Cyber insurance premiums in the United States declined for the first time since tracking began in 2015, falling 2.3 percent to just under $7.1 billion in 2024, according to a new report by AM Best. The drop, which reflects pricing corrections rather than a decrease in exposure, signals a steady demand for coverage despite softening rates.

The loss ratio for the cyber segment remained below 50 percent in 2024, indicating continued profitability for insurers underwriting the risk. Christopher Graham, senior industry analyst at AM Best, said, "When premium grew during the hard market cycle, the growth significantly outpaced the pricing increases, indicating that demand for cyber insurance was increasing as well. Considering that the premium decrease is close to the pricing decrease, that would indicate that the demand for cyber insurance is steady."

The report suggests that some large organizations may be shifting cyber risk to their single-parent captive insurers. These entities, which often report favorable loss experiences, retain premium within the parent company and typically do not submit cyber data to the National Association of Insurance Commissioners.

During the hard market, new capacity was largely supplied by surplus lines insurers, which have since slightly increased their market share even as total premiums contracted. Surplus lines paper continues to dominate complex cyber risks, with noticeable use across primary, excess, and endorsement layers.

The pricing advantages surplus lines writers gained during the 2020–2022 hard market have diminished. As the report notes, new entrants during that period benefited from elevated pricing levels without being burdened by prior underwriting losses.

AM Best has maintained a stable outlook for the global cyber insurance segment, citing measured underwriting practices amid an evolving risk environment.

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