Estimated reading time: 6 minutes
Losses in the U.S. cyber insurance market are rising while prices keep falling. That is the central finding of an annual market report from state insurance regulators. The National Association of Insurance Commissioners (NAIC), which represents them, publishes it each year.
The industry loss ratio rose to 53 in 2025 from 48.7, the highest since the pandemic-era ransomware spike. Meanwhile, the first quarter of 2026 brought an eighth straight quarter of U.S. cyber rate cuts. The NAIC calls this “the inverse of the 2021 hard market,” when a ransomware surge pushed prices up quickly.
Premium grew modestly. U.S. direct written premium, including alien surplus lines, reached about $9.46 billion, up 3.5% from $9.14 billion. That followed the market’s first-ever contraction in 2024. Domestic insurers wrote $7.46 billion, up 5.3%.
Claims grew faster. Domestic insurers reported 56,323 claims, up 20% and more than six times the 2017 level. Policies in force rose 33% to 5.84 million.
The market figures come from a cyber supplement that insurers file with their annual statements. NAIC data on alien surplus lines carriers fills in the rest. The report’s threat section draws on outside sources, including AM Best, Verizon and the FBI.
Where U.S. Cyber Insurance Market Growth Came From
Most new policies were endorsements, which bundle small amounts of cyber cover into other commercial policies. Endorsement policies rose 53.8% and primary policies 13.6%. Excess policies fell 45.3%.
Endorsements now make up 62.8% of policies but 3.9% of premium. Primary cyber policies hold 63.7% of premium, and excess policies 32.5%.
Surplus lines carriers write most of the business. Domestic surplus lines insurers wrote 51% of premium and alien surplus lines carriers 21%. Admitted carriers wrote 28%, and their premium slipped to $2.66 billion from $2.74 billion.
Chubb led the top 20 groups with $629 million in direct written premium. Beazley jumped from 16th to second with $571 million, ahead of Travelers at $544 million. The top 10 groups wrote just over half of domestic premium.
The Cyber Loss Ratio Climbs In The Primary Book
The deterioration sits mainly in primary policies. There, the ratio of losses and defense costs to premium rose about 8 points to 57%, the NAIC says. Excess improved slightly to 52%. The ratio on endorsements nearly doubled, from 10.2% to 19.1%.
Results varied widely among the largest groups. Berkshire Hathaway reported a loss ratio of 88%, QBE 74%, and At-Bay 73%. Beazley reported 16% and Starr under 4%.
Large claims are driving the cost. The NAIC cites Chubb’s 2026 claims report. Average severity for companies with $1 billion or more in revenue reached about $4.4 million. That was up from about $2.2 million in 2024. Claim frequency for those accounts fell to about 10 per 100 policies from 15.
Smaller accounts moved the other way. Severity for small and midsize companies fell to about $142,000 from $215,000, by Chubb’s figures. Coalition’s claims data, also cited in the report, showed severity down 19% to an average of $116,000.
Threats Cyber Insurance Pricing Has Yet To Reflect
The NAIC ties each threat trend to frequency, severity, or correlation pressure that the rate cuts have yet to reflect.
Attackers are moving faster. The average time to exploit a flaw fell from 2.3 years in 2018 to about 10 hours, according to CrowdStrike. Only 26% of critical flaws on CISA’s Known Exploited Vulnerabilities list were fully fixed, down from 38%, according to Verizon. Cisco Talos reported this week that published vulnerabilities doubled from a year earlier.
The report also points to frontier AI. Before Anthropic announced its Mythos model in April, a frontier AI system found thousands of unknown flaws. They spanned every major operating system and browser. Ninety-nine percent had no patch when disclosed. The report cites a June study, “Cyber Insurance Unpacked,” by the Financial Stability Institute and the International Association of Insurance Supervisors (IAIS).
Accumulation is the defining challenge of this cycle, the report says. Three providers hold over 60% of global cloud infrastructure, and each had a significant outage in 2025. A single failure could hit much of an insurer’s book at once. Swiss Re and the London School of Economics have made the same point.
Fraud is the other pressure point. Chief executives now rank cyber-enabled fraud above ransomware, the World Economic Forum found. Yet standard cyber policies often exclude or sharply limit social engineering and funds transfer fraud, the report notes. Those losses often fall to a separate crime policy.
The Protection Gap In The U.S. Cyber Insurance Market
Insurance covers only about 1% of global economic cyber losses, the same study found. Only an estimated 10% to 20% of small and midsize businesses buy cyber cover, the report says, citing Swiss Re. Cyberwrite found this week that several small firms in its loss cases did not survive their attacks.
Capacity remains plentiful. Insurers placed more than $1.3 billion in cyber catastrophe bonds in 2025, the report says.
AM Best keeps a stable outlook on the segment, the NAIC notes. But AM Best also warns that falling prices and rising losses could test whether rates are adequate.
FAQ – U.S. Cyber Insurance Market
How big is the U.S. cyber insurance market?
Insurers wrote about $9.46 billion in U.S. cyber premium in 2025, including alien surplus lines, up 3.5% from 2024, according to the NAIC.
Are cyber insurance claims rising?
Yes. Domestic insurers reported 56,323 cyber claims in 2025, up 20% from 2024 and more than six times the 2017 level.
What is the cyber insurance loss ratio?
The industry loss ratio rose to 53 in 2025 from 48.7 in 2024, the highest since the pandemic-era ransomware spike.
Are cyber insurance prices falling?
Yes. The first quarter of 2026 marked the eighth straight quarter of U.S. cyber rate cuts, the NAIC reports.
Why did the number of cyber policies grow so fast?
Mostly through endorsements, small amounts of cyber cover added to other commercial policies. They make up 62.8% of policies but 3.9% of premium.
How much of the cyber risk is insured?
About 1% of global economic cyber losses are insured, the NAIC report says, citing international supervisors.
Related Cyber Insurance Posts
- Ransomware Hit 77 Schools And Colleges Last Quarter. Children’s Identities Are At Stake.
- Cyber Insurance Companies Face Loss Ratio Impact from Amazon Outage(Opens in a new browser tab)
- RAND Read The Filings. Most Carriers Are Silent On AI Losses, And That Is The Problem.(Opens in a new browser tab)
- Sharp Drop in US Cyber Insurance Premium Rates Signals Market Pressure in 2025 – Fitch(Opens in a new browser tab)
- The Cyber Insurance Soft Market Is “Finding A Floor” – Will Every Carrier Survive?(Opens in a new browser tab)
1 thought on “Cyber Insurance Losses Rise As Prices Keep Falling, NAIC Report Shows”