Gallagher Re cyber index shows 32% fall at 1/1 in XoL risk-adjusted rates

Gallagher Re has reported a 32% decline in risk adjusted rates for cyber aggregate excess of loss protection at the 1 January 2026 renewals.

The finding comes from the latest update to the reinsurance broker’s cyber risk adjusted rate index, which tracks reinsurance pricing adjusted for expected changes in the underlying level of risk.

The index focuses on pricing movements for cyber aggregate stop loss and aggregate excess of loss (XoL) contracts.

Gallagher Re said these structures have become the non proportional solution of choice for the majority of cyber reinsurance buyers since their introduction in 2015.

It added that the aggregate market remains the most well capitalised segment of the non proportional cyber reinsurance market and experiences the least variation in pricing views among reinsurers.

The broker said this makes it the most appropriate segment for an industry wide pricing index.

Unlike property reinsurance, where limit is directly correlated to risk, the cyber index uses Gallagher Re’s proprietary view of risk.

This includes considerations for underlying rate change, loss trend, selection of volatility parameters and catastrophe model selection.

The broking firm said an oversupply of capacity at the 1 January renewals drove the steep decline in risk adjusted rates.

Buyers also benefited from improvements in structural terms alongside pricing reductions, the broker highlighted.

Gallagher Re also said many cedants saw reductions in attachment points at renewal.

This occurred against a backdrop of expectations that primary cyber rates will continue to soften during 2026.

Ian Newman, global head of cyber, Gallagher Re, emphasised that buyers continue to seek effective non proportional cyber protection.

“Reinsurance buyers are constantly looking for suitable and effectively priced non-proportional cyber protection,” Newman said.

“Well-designed aggregate products provide the optimal solution for those cedants looking for asymmetric protection against either a highly adverse loss trend, a frequency of event losses, and or a single catastrophic or systemic event,” he continued.

“Gallagher Re therefore believes that over the long-term, an index of the cyber aggregate XOL market will provide a useful and insightful barometer as to the state of the cyber reinsurance rating environment,” Newman added.