US cyber market loss ratio rose to 53% in 2025 as claims increased: Aon

By Erin Ayers, Front Page News

While the loss ratio for the U.S. cyber market increased four percentage points to 53% in 2025, it remains below the results seen at the height of the ransomware epidemic in 2020-21, keeping the line profitable, according to Aon’s latest report.

“Despite loss ratio deterioration, there remains 47 points of margin for other expenses to maintain a combined ratio below 100%,” Aon commented in its annual U.S. Cyber Market Update.

Broken out by policy type, loss ratios for primary policies and cyber endorsement business increased to 57% and 15% last year. Excess business decreased to 52%.

“Increased frequency and decreased earned premium per policy outpaced reductions in severity, which led to loss ratio deterioration in 2025,” Aon explained. Reductions in earned premium as a result of market softening also contributed to increased loss ratios.

However, loss ratios for individual insurers varied from the industry average, “some notably so,” Aon commented. Excluding three “outlier” firms, at the low end were loss ratios of 3% compared to 83% at the high, per the report.

U.S. cyber written premiums rose by nearly 7% (about $486 million) year-over-year to $7.6 billion in 2025, with most of the growth coming from an increase in policy count rather than being rate-driven, Aon noted.

“In 2025, policy count increased by 32.9% while [written premium per policy] decreased by 19.6%. Together, the increased policy count more than offset the reduction in premium per policy which led to a 6.9% increase in written premium from 2024 to 2025,” the broker said.

Primary policies increased by 17.2%, while endorsements rose 52%, Aon found. Excess policy count decreased by 43%, year-over-year.

“The decline in written premium per policy is consistent with a soft rate environment for the cyber market which has persisted over the last few years; however, insurers may be finding new opportunities in the market for growth, as evidenced by increased policy counts,” the broker said.

However, Aon also took a close look at the changes to that 19.6% decrease in written premium per policy and found “a more nuanced picture.” The data showed softening wasn’t evenly distributed across the market but concentrated in excess cyber policies. With a median decrease of 14%, excess cyber softening far outstripped the median decreases of 2% and 1% for primary and endorsement business.

The data showed an uptick in the number of market players reporting direct written cyber premium in 2025, up to 225 from 218 in 2024.

While most cyber premium comes from primary policies (about $4.7 billion), 63% of the national policy count can be attributed to endorsement business. Endorsement business only accounts for about $393 million in premium, while another $2.4 billion comes from excess cyber policies.

Aon also observed a shift in the trend toward competition as defined by market concentration, with the top 5 writers increasing their market share to 33% after trending downward over the last three years.

The U.S. cyber market’s claim count increased 25% in 2025, with 59% of insurers writing more than $5 million in written premium seeing an uptick in frequency, at a median increase of 10% (down from 22% in 2024). However, Aon noted that “a few outlier companies” actually saw significant decreases in frequency.

Claim severity remained relatively consistent from 2024 to 2025, per the report. Paid losses increased to $2.98 billion in 2025, which may include older claims, according to the broker.

However, Aon also pointed to an increase in third-party claims, to 27% of all claims. While this is still “meaningfully lower” than first-party claims, it is “worth monitoring” as it points to continued lengthening of the tail for cyber claims.

“Prior to 2022, third-party claims had been dropping as a proportion of total, which aligns with the timing of the surge in ransomware activity during 2019 and 2020,” the broker said. “Since then, ransomware claims have evolved and may have third-party components in addition to other factors such as new threat actor techniques that may generate third-party claims.”

Aon’s annual U.S. Cyber Market Update analyzes data from the National Association of Insurance Commissioners (NAIC). The broker noted that NAIC is a “sizable” but still partial picture of the market, since non-U.S. insurers including Lloyd’s of London syndicates are not represented.

Managing Editor Erin Ayers can be reached at [email protected]