Cyber insurance costs fell 7% in the first quarter and broader coverage with increased limits is now available in most markets for organisations with robust security.

It was the 11th consecutive quarter of pricing decreases, driven by ample capacity and insurer aggression at renewals, according to Aon’s 2025 Cyber Risk Report.

Stronger competition has led to lower self-insured retentions, an easing of required sublimits and coverage enhancements for policyholders.  

The average payout fell 77% in the quarter even as claims frequency rose, and Aon says this “paradox helped to maintain the soft market”.

Claims severity has reduced, supported by stronger cybersecurity.  

“Insurer loss ratios were not materially impacted, and buyers’ market conditions continued through 2024 for cyber amid a well-capitalised and competitive environment,” the report says. “Favourable conditions are expected to continue in 2025, supporting growth in emerging cyber markets.

“In 2025, we expect pricing to continue to moderate, with more favourable conditions across an increasingly wider range of risks and geographies. Ample capacity and aggressive competition continue to drive a buyers’ market for cyber despite an increase in ransomware activity in prior years.”

Retail and reinsurance cyber markets recorded solid margins, signalling the global industry is stable despite growing competition and breach threats.

In most markets, moderate rate reductions, broader coverage and increased limits are available for “risks with responsive cybersecurity controls”.

Reinsurance supply “remains abundant” relative to demand, and alternative capacity such as insurance-linked securities and catastrophe bonds is increasing.  

“This supply-demand imbalance led to a favourable January renewal cycle for buyers of cyber reinsurance,” Aon says.

See the report, which analyses more than 1400 global cyber events, here.