Gallagher Re, the global reinsurance broking and advisory firm, reports that an oversupply of capacity led to a 32 per cent decline in the cyber aggregate excess of loss (XOL) risk-adjusted rate (RAR) change as of 1 January 2026. The latest edition of the cyber rate index monitors reinsurance prices adjusted for expected changes to the underlying level of risk. Unlike property, where limits are directly correlated to risk, the cyber index utilises Gallagher Re’s proprietary view of risk (VoR). This includes considerations for underlying rate change, loss trends, selection of volatility parameters, and catastrophe model selection. The index specifically focuses on pricing changes for cyber aggregate stop-loss and XOL contracts. These structures have become the non-proportional solution of choice for the majority of cyber reinsurance buyers since their introduction in 2015. Furthermore, the aggregate market remains the most well-capitalised segment of the non-proportional cyber reinsurance market. It experiences the least variation in pricing views among quoting reinsurance market participants, providing a stable basis for an industry-wide pricing index. Ian Newman, global head of cyber for Gallagher Re, says: “Reinsurance buyers are constantly looking for suitable and effectively priced non-proportional cyber protection”. Newman adds: “Well-designed aggregate products provide the optimal solution for those cedants looking for asymmetric protection against either a highly adverse loss trend (such as that seen with the rise of ransomware 2018 — 2021), a frequency of event losses, and/or a single catastrophic or systemic event”. He concludes: “Gallagher Re therefore believes that over the long-term, an index of the cyber aggregate XOL market will provide a useful and insightful barometer as to the state of the cyber reinsurance rating environment”.
