The Cyber insurance market is seeing a surge of capacity in 2025. While this surge is helping to keep pricing competitive, it's also creating a more complex environment that demands a sharper focus from brokers.
A lot of this new capacity is being driven by carriers that previously pulled back now re-entering the market, lured by favorable claims trends and the potential for top-line growth.
"We're seeing some carriers return to some classes of business that they may have pulled out of in the past — like schools and manufacturing — and we also saw some entirely new entrants into the market last year," says RPS Executive Lines Practice Leader Tim Foody. "This is keeping the market extremely competitive from a pricing perspective, particularly in the SME [small to medium enterprise] space, and we're seeing some slight coverage expansion too."
Foody adds that this is being driven by a reassessment of risk.
"Many of these carriers are reassessing their books and realizing that claim development wasn't as severe as expected," he says. "Others see improved risk management controls or new endorsements that make certain segments more viable.
"If they're not expanding with new buyers, they're looking for opportunities in areas where they once played but now feel comfortable returning."
But this increased appetite comes at a time of rising cyber threats.
"Ransomware is definitely becoming an issue again, and a lot of the carriers we speak to talk about the increased numbers of ransomware events they're getting in their books of business," Foody says. "The bad actors continue to get better, and as much as the security industry can do, they're always finding ways to get around them — that's their job, just as much it's our job to stop them."
This shifting threat landscape means carriers are likely to become more selective.
"We're likely to see more of these types of cyber events in the future," Foody explains. "A major incident in 2024, along with others in 2023, has reinforced the need to evaluate key vendors and suppliers — especially those handling sensitive data.
"I expect underwriters to place greater emphasis on critical vendor management, with more questions around supplier security in the coming year."
As scrutiny increases, brokers must pay close attention to policy wording.
"Cyber policies are largely standardized, but the small differences in coverage language — especially around social engineering and claims payments — can determine whether a claim gets paid," says Foody. "That's why it's crucial to work with a broker who isn't just placing business but also advocating during the claims process.
"A strong wholesale partner helps navigate policy nuances and ensures clients get the resolution they need."
Learn more about what's next for the Management and Professional Liability market in the 2025 Management and Professional Liability Market Outlook.
