The U.S. cyber insurance market may be facing a time of transition as certain signs point to eventual adverse development.
According to AM Best, the market’s loss ratio in 2025 increased for the second straight year to 53—the first time over 50 since the ransomware spike seen during the COVID pandemic.
In the meantime, third-party claims are rising and total premium was basically flat after considering that a perceived increase in 2025 was caused by insurer Beazley’s move of a block of business from an offshore entity to the U.S.
Chubb occupies the top spot among largest cyber insurers but Zurich’s acquisition of Beazley will make it the top cyber insurer based on 2025 direct premiums, AM Best noted.
Prices are still going. AM Best’s cyber market report said the first three months of 2026 saw the eighth consecutive quarter of pricing cuts in the US cyber insurance market.
“As long as pricing continues to decline, insurers will have difficulty reversing the increasing loss ratio,” AM Best said.
Third-party claims, which are trending up 30%, will add to uncertainty of future losses because they typically have a longer tail. Surplus lines carriers are in line to take a di
rect hit, since they now account for nearly two-thirds of all cyber insurance premium, AM Best said, and already had an incurred loss ratio of nearly 56 in 2025. Admitted c
arriers carry a loss ratio of 50.2.(The paid loss ratio remains in favor of surplus lines.)
AM Best said the marketplace is becoming two markets, with surplus lines writing primary and excess cyber-specific policies and “another market focused on endors
ements to other commercial policies.” However, with surplus carriers looking to take the brunt of long-developing third-party claims, the “paid-loss advantage for surplus lines c
arriers may dissipate and possibly even turn the other way,” AM Best added.
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Florida Gov. Ron DeSantis has signed a bill that will create a new clearinghouse for Citizens Property Insurance Corp. commercial policies, a bill that a num
ber of brokers and agents have called “unnecessary” and little more than a sop to one major brokerage.
Senate Bill 1028, pushed this spring by state Sen. Joe Gruters, now requires Citizens to establish the clearinghouse, which ostensibly will make it easier to depopulat
e the commercial side of the state-created insurer of last resort.
The bill passed in March and it wasn’t clear if DeSantis would support it. But it took effect upon
his signature this week with little fanfare. The measure notes that surplus lines insurers should be considered for Citizens’ takeouts, as long as they carry a strong financial strength rating.
“For commercial residential and commercial nonresidential risks submitted through the commercial lines clearinghouse pursuant to s. 627.3518, if an approved surplus lines clearinghouse insurer offers comparable coverage
as defined in s. 627.3518(1) and the total cost of insurance coverage for the specific risk is not more than 15 percent greater than the corporation’s total cost of insu
rance coverage for the specific risk, the corporation may not issue new coverage unless otherwise provided in s. 627.3518(10),” the bill reads.
