The Rate Side of the Story
Cyber liability was one of five commercial lines to post an outright rate decline in Q2 2025, alongside EPLI, terrorism, workers’ compensation, and D&O, a pattern independently well established in the Council of Insurance Agents & Brokers’ own survey data. The specific magnitude of cyber’s decline, reported at 1.5% for that quarter, reached this piece through secondary reporting rather than a direct pull from CIAB’s own survey page, so treat that precise percentage as a reported figure pending independent confirmation, even though the broader five-line-decline pattern it belongs to is solid.
Either way, the direction is consistent: cyber is one of the softer lines in a market that, overall, grew just 3.7% in Q2 2025, itself down from 4.2% in Q1.
The Contrast With a Line That Is Still Hardening
Set the reported 1.5% cyber decline next to umbrella’s confirmed 11.5% increase in the same Q2 2025 survey, driven by 135 nuclear verdicts in 2024, and the range across commercial lines right now is genuinely wide. A producer moving between a cyber submission and an umbrella submission in the same week is pricing two lines telling almost opposite stories about market direction.
That contrast alone would make cyber worth a dedicated look. It is not the whole story.
The Claims Side of the Story
NetDiligence’s fifteenth annual Cyber Claims Study, which the firm reports analyzed 10,402 cyber insurance claims tied to incidents occurring between 2020 and 2024, found the average claim payout rose to $118,000 in 2025, up from $96,000 in 2024. These figures reached this piece via a secondary summary of NetDiligence’s release rather than the underlying study itself, so treat them as reported rather than independently re-verified, though the direction, rising claim severity, is consistent with what carriers cite as pressure on cyber pricing generally.
A line with reportedly softening rates and reportedly rising claim payouts in the same period is not a line getting simpler to underwrite, whatever the headline rate trend suggests on its own.
Why Frequency and Severity Are Pulling in Different Directions
The same reported NetDiligence study breaks the claims down by type: business email compromise was the most frequent claim category at 33% of all claims, but carried a comparatively lower average payout of $68,000. Ransomware was less frequent, 28% of claims, but reportedly drove 52% of total claims costs, evidence that a smaller number of ransomware events carries a disproportionate share of the dollar exposure behind those rising severity figures.
That frequency-versus-severity split, as reported, is a more useful story for a producer to actually understand than the single average payout figure on its own, since it explains why a book can look statistically fine on frequency while still carrying real severity risk sitting inside a small number of claims.
Why This Creates an Unusual Selling Environment
This is reasoning, not a cited statistic. A prospect who has heard that cyber rates are softening has a real, if partial, reason to expect an easier renewal. A carrier underwriting the same account against reportedly rising claim severity has a real, separate reason to stay cautious on limits, retentions, or specific sub-coverages, even while the headline rate on the account looks flat or down. A producer sitting between those two realities is managing an expectation gap that a simple rates-are-down pitch does not prepare a prospect for.
That gap is specific to cyber right now, and it is not a story most other commercial lines are telling in 2026.
What a Cyber Producer’s Pitch Has to Do Differently
Practitioner guidance, not a cited statistic: leading purely with the softer headline rate risks a mismatch the underwriting process will expose anyway, once sublimits, retentions, or specific exclusions come back tighter than a flat-rate pitch implied. A pitch that sets the expectation early, coverage terms and structure matter as much as the top-line premium this year, tends to survive contact with the actual submission better than one built entirely around price direction.
Human + AI SDRs can surface a prospect’s basic cyber exposure profile before a meeting is even booked, so a producer walks into this specific, unusually two-sided conversation with real information instead of a generic rate pitch.
Sources
The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.
- CIAB, Q2 2025 P&C Market Survey
- PR Newswire, NetDiligence Releases Fifteenth Annual 2025 Cyber Claims Study