DUAL: cyber market nears inflection point as pricing floor approaches

DUAL has warned the global cyber insurance market is fast approaching an inflection point, as prolonged softening and rising risk exposures begin to erode its profitability.

In its latest report, “Finding a Floor”, the firm said 2026 represents a critical juncture, with pricing declines, increased competition and a heightened threat landscape converging to test the market’s sustainability.

The managing general agent’s (MGA) analysis suggests the sector is nearing a pricing floor, particularly in the US, which accounts for around 70% of global cyber premium and continues to act as a leading indicator for broader market trends.

While international markets remain favourable for buyers, with average pricing down 43% since late 2023, Howden-owned DUAL said the continuation of current conditions risks a sharper market correction.

Richard Clapham, CEO of DUAL, said the market is entering a new phase of development.

“Cyber insurance continues to play a vital role in enabling resilience against an increasingly complex and interconnected threat landscape,” he said.

“With the global cyber insurance market approaching a significant inflection point, our DUAL team has developed a global outlook that brings together data driven trends and perspectives from our regional cyber experts,” he added.

The cyber study highlights growing pressure on margins, driven by increasing claims severity, broader coverage and expanding supply chain exposures.

At the same time, competition has led to lower pricing, larger line sizes and looser terms, resulting in more risk being written for less premium.

DUAL said combined ratios are already deteriorating and could exceed 100% in some markets by 2027 if current trends persist.

Ali Khodabakhsh, head of cyber for Europe at DUAL, said the cyber market now faces two potential paths.

“Margins will come under pressure for some carriers if market softening persists,” he said.

“The first leads to gradual price stabilisation over the next 12 months, supporting a sustainable and more resilient market,” he continued.

“The second sees existing soft conditions extend into this year and next, increasing the risk of a more severe correction,” he added.

Khodabakhsh said underwriting discipline will be key to navigating the next phase.

“It is in clients’ interests that the market delivers the former,” Khodabakhsh said.

“Underwriting expertise, portfolio resilience and long-standing relationships will determine which carriers are best positioned to navigate the next phase,” he continued.

Paul Schiavone, executive vice president for cyber and professional lines at DUAL North America, said underlying pressures are building.

“Our analysis shows that underlying pressures are building,” he said.

“As the market moves towards a more disciplined phase, sustaining long-term capacity and pricing adequacy will be essential not only for insurers, but for the broader relevance of insurance as a mechanism for risk transfer,” Schiavone added.