Reinsurance rethinks cyber tail losses as market hits $16b

Global gross written premiums climbed from around $8b in 2020.

Global cyber gross written premiums have doubled from around $8b in 2020 to nearly $16b, and Gallagher Re estimates they could reach $26b by 2030. 

As insurers retain more risk and reduce quota-share cessions, demand for excess of loss reinsurance could almost double to $9b a year by the end of the decade.  

Gallagher Re highlighted how combining cyber and property reinsurance could help insurers buy protection against extreme losses more efficiently. 

The firm’s new report titled “Cyber and Property Combined Covers: Buying the Tail More Efficiently” said cyber has become a major source of volatility for the insurance industry, now comparable to traditional property catastrophe risks.  

The report explains that reinsurers still charge high premiums for standalone cyber cover due to uncertainty and potential systemic losses. 

Combining cyber and property catastrophe risks in a shared-limit structure can lower costs by about 25%, since the two perils are largely uncorrelated and require less total capital to underwrite.  

Gallagher Re expects the next stage of efficiency to come from the Insurance-Linked Securities (ILS) market, where cyber catastrophe bonds are growing quickly. 

Assets under management in the ILS market reached $128b by December 2025, and Beazley’s $300m cyber bond issued in 2026 was the largest so far.  

The broker believes combining cyber and property in the ILS market could yield savings of around 20%. 

Gallagher Re says the approach could become a key way to manage fast-rising cyber tail risks whilst diversifying capital sources beyond traditional reinsurers.