Gallagher warns “tides are shifting” in the cyber market, with risk escalating amid a rise in artificial intelligence-fuelled threats.

This year has been characterised by flexible policy coverage and pricing, the broker says in a market update.

While rates are slowly flattening after large reductions in previous years, competition remains strong and the market continues to lean in buyers’ favour.

“The competition and growth strategies in underwriting have led to better premiums and favourable terms, making this year the best time to negotiate unique and broad coverage,” the update says.

“Underwriters right now have a greater risk appetite to cover clients they historically might not have covered.

“Nevertheless, tides are shifting, with a heightened threat environment, the proliferation of AI-enabled attacks and imbalanced claims versus premiums for high-hazard risks.”

The update says threat actors have adopted AI “to scale and sharpen attacks, from crafting convincing phishing emails to automating malware delivery, thus exposing vulnerabilities with speed and precision”.

Gallagher expects the AI trend “will most likely continue, thanks to the sheer ease of accessibility to AI-based phishing tools, which now cost threat actors as little as $75 to execute”.

The broker believes a hardening market could emerge in 2026-27 and beyond.

Some industry sectors could face “more expensive premiums ... or lack the flexibility for customisation that the market shows currently. However, sharp spikes are not anticipated, and pricing trends are expected to remain more measured given the market’s increased maturity.”

For now, the market is characterised as relatively stable, with insurance providers ready to commit $10 million on most cyber risks.

The update says most industry sectors continue to attract competitive pricing, including rate reductions.

“A common trend is insureds reinvesting the premium savings into higher limit deployment.”