2026 update to the Gallagher Re Cyber Risk Adjusted Rating (RAR) Index
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Authors: Patrick Brooke Richard Burn

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"Reinsurance buyers are constantly looking for suitable and effectively priced non-proportional Cyber protection. Gallagher Re therefore believe that over the long-term, an index of the Cyber Aggregate Excess of Loss market will provide a useful and insightful barometer as to the state of the cyber reinsurance rating environment." —Ian Newman, Global Head of Cyber.

At 1.1.2026 we observed an oversupply of reinsurance capacity within the Cyber Aggregate Excess of Loss market, resulting in an average risk-adjusted rate change of -32%. Buyers of Cyber Aggregate Excess of Loss reinsurances have benefited from improvements in both structural terms and pricing. Meanwhile, underlying cyber rates are expected to continue to soften in 2026. In light of this, the index is now referred to as Gallagher Re Global Cyber Aggregate Excess of Loss Risk Adjusted Rating (RAR) Index.

Source: Gallagher Re

The Gallagher Re Cyber RAR Index is a measure of the change in reinsurance prices adjusted for expected changes to the underlying level of risk. Unlike property where limit is directly correlated to risk, a cyber reinsurance rating index requires us use our proprietary view of risk (VoR) which includes considerations for underlying rate change, loss trend, selection of volatility parameters and catastrophe model selection. It is the consistency of our approach that now enables us to credibly track the reinsurance rating environment year on year.

If you would like to learn more, please do not hesitate to contact a member of the Gallagher Re Cyber team.

Why aggregate solutions only?

  • As the preeminent cyber reinsurance broker, we are committed to working with both cedants and markets to develop and deliver effective reinsurance solutions that solve for the specific concerns of our clients and we are seeing both per occurrence and per risk solutions to become an increasingly prominent part of the non-proportional risk transfer landscape.
  • However, isolating and protecting purely against cyber CAT losses via event/occurrence-based solutions remains a nascent, highly nuanced and inconsistently priced part of the reinsurance product landscape not least due to the variation in event definitions and coverage but also differences in views of tail-risk between cedants and reinsurers, all compounded by a lack of historical event loss data points and a rapidly evolving (re)insurance market.
  • It is no surprise therefore that since their introduction in ~2015, Aggregate Stop-loss and Aggregate Excess of Loss structures have become the non-proportional solution of choice for the majority of cyber reinsurance buyers.
  • 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.
  • The aggregate market also continues to be the most well capitalized part of the non-proportional cyber reinsurance market and experiences the least variation in pricing views across quoting reinsurance market participants making it the most appropriate basis for an industry wide pricing index.

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