US cyber: looking beyond stabilising pricing
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Summary
Pricing settles into a steadier rhythm
Rate softening has now entered its fourth year and whilst Howden Re's pricing data shows cyber rates continuing to soften, the pace of reduction has materially decelerated. The RARC reforecast for 2026 appears more accurate than previous years, with the original projection of -4.9%, lining up well with actuals at -5.4%. Between 2023 – 2025 we saw over an 8-percentage point delta between forecast and actuals.
The picture diverges sharply by geography. Since the start of 2024, US rates have fallen an estimated 9.7%, while rest-of-world pricing is down 24.5%. Competition has increased in international markets because of the opportunities presented by lower penetration rates and a more favourable loss environment.
“Coalescence in actual and expected RARC is a positive sign that the market is stabilising,” said Luke Foord-Kelcey, Global Head of Cyber at Howden Re. “Whilst the 2023 underwriting year is of interest, this is materially different from 2019 when the whole market experienced difficulties. This is more specific, depending on the demographics of the underlying portfolio.”
The 2023 underwriting year remains a slow burn
The 2023 underwriting year is still developing, particularly in the US, where privacy and data breach litigation has spread from large enterprises to smaller organisations.
Third-party claims mature more slowly than the ransomware losses behind the 2019–2021 hardening. Howden Re’s Cygenesis report uses the D&O market as a cautionary parallel, where long-tailed deterioration took years to emerge in reported results and pricing was slow to respond. Howden Re expects outcomes for the 2023 underwriting years to vary by carrier depending on the underlying portfolio being written.
“In the US, privacy litigation has steadily worked its way down the market, and smaller businesses are now facing claims that once felt like a large-company problem,” said Michael Giuliano, Director at Howden Re. “These trends also help reinforce the value proposition cyber insurance provides to policyholders. We’re increasingly seeing cedents leverage technology enabled distribution and strategic partnerships to widen access to coverage, which could support greater adoption, more diversified portfolios, and continued opportunities for reinsurers to support.”
Faster discovery, steady defences
AI-assisted tools are accelerating vulnerability discovery. The number of vulnerabilities added to the MITRE vulnerability database from January to September 2026 increased by 105% compared with the same time period in 2025. Importantly, however, Howden Re’s H1 2026 Cyber Watch research found that known exploited vulnerabilities (KEV) had not increased at the same pace as vulnerability identification. While H2 has seen an increase in known exploited vulnerabilities, they make up less than half a percent of all vulnerabilities.
Howden Re currently sees this primarily as a frequency story. Faster vulnerability discovery and exploitation could increase attritional pressure over time, although the impact on insured losses will depend on how effectively organisations respond. Monitoring indicators such as the US Cybersecurity and Infrastructure Security Agency’s (CISA’s) Known Exploited Vulnerabilities catalogue can help underwriters identify emerging exploitation trends.
“While we are seeing exploited vulnerabilities pick up, it is worth keeping in proportion,” said Harriet Gruen, Head of Cyber Threat Intelligence at Howden Re. “Defence-in-depth measures such as segmentation, allow-listing and strong access controls all sit between an exploited vulnerability and a claim, and they’re doing a lot of work. The task for the market will be to follow the indicators closely and let them inform pricing accordingly.”
Looking ahead to 1.1
Reinsurance strategy continues to evolve alongside these trends. Howden Re’s placement data, set out in the H2 outlook, shows the multi-year decline in quota share cessions has slowed, with the weighted average for placements live at 1 July standing at 47.1%, 1.5 points lower year on year. Carriers continue to tailor their balance of proportional and non-proportional protection to their individual portfolios and growth plans, and the 1 January renewals will give a clearer picture of how buying patterns develop. It is of note, though, that there are some early indicators that this cession downward trend may reverse in 2027, particularly on a weighted-average basis.
Benign catastrophe years have kept non-proportional buyers in a strong position. At mid-year, aggregate stop loss attachment points averaged 108% of underlying limits, eight percentage points lower than in 2025. The average rate on line eased to 7.23% with risk-adjusted reductions approaching 20%. Yet event risk remains, particularly as organisations become more dependent on shared technology infrastructure and connected applications. Howden Re estimates that a loss comparable to a moderate property-catastrophe year, such as 2008, could materially affect pricing in a market where the ten largest reinsurers provide around 87% of capacity.
The carriers best placed for 1 January renewals will look beyond today’s pricing environment to understand how claims development and emerging threats could affect future performance.