The Cyber Insurance Soft Market Is “Finding A Floor” – Will Every Carrier Will Survive?

Estimated reading time: 8 minutes

After three years of rate cuts, margins are shrinking in every major market. DUAL’s 2026 report warns that 2026 will be a turning point. The US market is expected to become unprofitable in 2027. Now, discipline is what separates the winners from the losers.

A Market At A Turning Point

Cyber insurance pricing has dropped for three years. This soft market has helped buyers, but it has also reduced the underwriting margins needed for a healthy market. DUAL, a leading specialist MGA, has analyzed where this trend is heading. Their conclusion is clear: the market is nearing a pricing floor, and not every carrier will come through it successfully.

The report, called “Finding a Floor,” uses proprietary data from the US, Europe, the UK, and Australia and New Zealand. It looks at combined ratios, rate changes, loss trends, and capacity in all four regions. The report shows a market in transition, shifting from a period of easy conditions to a phase where underwriting discipline is key to survival.

How The Market Got Here

Cyber insurance has taken an unusual path. Before 2020, most growth came from new buyers. From 2020 to 2022, the market hardened as ransomware attacks increased and annual rates rose by about 70%. This correction nearly doubled the global premium base, restored profitability, and brought in new capacity. The following soft market has lasted three years. Falling rates, broader policy terms, higher limits, and more competition have steadily reduced margins. Exposure has not grown as fast as rates have dropped, so insurers are taking on more risk for less premium.

The US: First In, First Out

The US makes up about 70% of global cyber gross written premium and is usually the first market to change. According to DUAL, US rate reductions slowed to low single digits in early 2026 renewals, which is an important sign of stabilization. The average loss ratio rose to about 55% in 2025, up from 49% in 2024. With a 35% expense ratio, underwriting margins are now very thin. DUAL expects the US combined ratio to reach 97% in 2026, and the market could become unprofitable in 2027 if current trends continue.

The US loss situation is complex. Small and medium-sized businesses routinely face business email compromise claims, while larger accounts have more exposure to ransomware and litigation. Supply chain concentration increases aggregation risk for both groups, and legal risks are growing. DUAL notes that “a structurally elevated risk environment and prolonged softening have brought the US cyber market to an inflection point.” Broad rate increases are unlikely this year unless there is a major loss event. Instead, selective increases in areas with worsening losses are more likely in the near future.

Europe: Softening Deep, Floor Coming

European cyber insurance prices have dropped 43% from late 2023 to late 2025, compared to only 13% in the US during the same time. Most of the global softening is coming from international markets. There is plenty of capacity and strong competition. Spain, Italy, and France are the most competitive markets. The DACH region, which includes Germany, Austria, and Switzerland, is more stable because of stronger broker and carrier loyalty.

DUAL’s models forecast that Germany’s combined ratio will reach 97% by 2027. Portfolios that started in 2024 with a loss ratio of 55% or more are already struggling with profitability. The report highlights the expansion of supply chain coverage as a concern. Carriers are adding contingent business interruption and non-IT supply chain coverage without raising premiums. While underwriting standards for ransomware have improved, systemic supply chain aggregation risk is still mostly untested. Expanding untested coverage at lower prices is risky in a soft market.

The UK: Late-Stage Softening

The UK market’s rate declines are slowing. Earlier renewals saw rate cuts of 20-30%, but in early 2026, reductions are now in the mid-to-high single digits. Some accounts with past losses or tight margins are seeing flat renewals. UK cyber insurance penetration is only 15-20%. New premiums from micro and SME clients have not absorbed the extra capacity, much of which comes from MGAs. UK loss ratios have increased from 30-40% two years ago to 50-60% now. Some carriers are easing minimum control requirements and delivering broader coverage. DUAL points out that this is due to competition, not an improved threat environment. Established carriers with diverse portfolios can better handle ongoing losses, while newer entrants who offer broader terms and lower prices are more at risk for negative outcomes.

ANZ: Growth Ambitions Outrunning Discipline

Australia and New Zealand are still the softest markets in DUAL’s analysis. New MGAs and Lloyd’s-backed platforms have increased capacity over the past 12 to 18 months. SME portfolios are renewing with rate cuts of 10-15%, leading to total decreases of 20-30% from peak prices. Coverage terms are also expanding, including non-IT supply chain extensions, often without extra premium. Claims have stayed relatively low, with business email compromise and funds transfer fraud being the most common. In Australia last year, the median amount misdirected was about AUD26,000, while the largest case was AUD2.3 million. Importantly, the lack of large ransomware losses in ANZ is due to timing, not a lower threat. Fifty-three percent of cyber incidents in the region affect organizations with fewer than 100 employees. DUAL expects ANZ combined ratios to approach profitability thresholds by 2027-28 if current trends continue.

Five Themes Defining The Market

DUAL points to five main forces shaping the market now. There is still plenty of capacity, but carrier performance varies. Ongoing rate cuts mean insurers are taking on more risk for less premium. While overall losses have been manageable, ongoing claims continue and their severity is increasing. Margin compression is now clear in underwriting results everywhere, and differences in performance are growing as discipline is tested. Market leaders with strong track records are moving ahead. The report states clearly: “underwriting expertise, portfolio resilience, and long-standing relationships will determine which carriers are best positioned to navigate the next phase.”

Two Ways Forward

DUAL outlines two possible scenarios for the next 12 to 24 months. The first is gradual stabilization, where the US leads a steady market shift, margins reach a floor, and the cycle resets without a major correction. The second is continued softening through 2026 and 2027, which raises the risk of a sharp correction caused by ongoing losses or a major event. DUAL is clear that the first outcome is better for both clients and underwriters. A severe correction would hurt the whole value chain. Brokers should consider carrier resilience and underwriting history in their placement decisions now, before market conditions force their hand.

What This Means For Buyers And Brokers

For buyers, cyber insurance pricing is still favorable. Rates are falling in most international markets, limits are higher, and terms are broader. The chance to get strong coverage at good rates is still available, but the report warns this window is closing. For brokers, the focus should be on choosing the right carriers. The soft market has made price the main concern, but soon, stability and commitment to capacity will matter more than just the lowest premium. DUAL’s analysis urges brokers to work with experienced capacity providers who have shown consistent performance in different pricing environments. The pricing floor is coming, and the carriers who handle it well will still be around when the next hard market comes.

FAQ Dual Cyber Insurance Pricing Report