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Cyber insurance loss ratio rose to 53.0 in 2025 amid pricing cuts
AM Best said U.S. cyber direct premiums rose to $7.5 billion in 2025, but much of the increase reflected business moved onshore rather than organic growth.
The U.S. cyber insurance market is seeing worsening underwriting results as falling prices fail to keep pace with losses, according to AM Best. AM Best reported that the industrywide cyber insurance loss ratio climbed to 53.0 in 2025, the highest level since the ransomware surge of the COVID era, as claims shifted toward more complex, longer-tailed third-party incidents.
AM Best said total cyber direct premiums written reached $7.5 billion in 2025, up from $7.1 billion in 2024. The firm added that the year-over-year increase was largely driven by one insurer moving a block of business from an offshore entity to a U.S.-domiciled company, rather than organic market growth.
The pricing environment is also weakening the outlook, with the first quarter of 2026 marking the eighth consecutive quarter of pricing cuts. AM Best warned that reversing the deteriorating loss ratio will be difficult as long as pricing remains under pressure.
AM Best described the market as increasingly bifurcated between surplus lines carriers that write primary and excess cyber-specific policies, and a second segment focused on endorsements to other commercial policies. By policy count, endorsements dominate with more than 2.5 million of about 4.7 million cyber policies in force, while by premium, primary cyber policies account for over 60% of the market, with average premiums of $2,287 for primary policies versus $151 for endorsements. AM Best also said surplus lines carriers hold nearly two-thirds of cyber premium, and their incurred loss ratio rose to 55.9 in 2025 compared with 50.2 for admitted carriers.