Rising claims and higher loss ratios are putting pressure on insurers, even as pricing conditions soften in a cyber insurance market that Bermuda continues to dominate.

The Bermuda Monetary Authority’s Cyber Underwriting Report 2025 shows that Bermudian-based groups and commercial insurers wrote or consolidated $10.78 billion in cyber premiums in 2024, with the captive sector adding another $190 million. Together, those figures represent about 73 per cent of global cyber premiums.

At the same time, claims activity accelerated sharply. Insurers paid out $903.6 million for 93,757 cyber claims in 2024, a steep increase from $521.9 million across just 19,680 claims in 2023. The surge reflects both higher claims frequency and broader cyber coverage, the BMA said.

“The Bermuda cyber insurance market saw higher loss ratios and more frequent claims, driven by increased risk and broader coverage,” the BMA said.

Aggregate incurred losses for commercial insurers rose to $1.45 billion, up from $1.03 billion the previous year. The overall cyber loss ratio climbed to 29 per cent, compared with 21 per cent in 2023, while direct cyber policies recorded a loss ratio of 50 per cent.

Despite the rise in losses, market conditions have shifted towards softer pricing. The report points to expanded capacity, more competition and more underwriting flexibility across global cyber markets. In response, insurers are moving away from bundled cyber coverage towards more targeted stand-alone policies, the report stated.

Packaged cyber premiums fell sharply, from $1.8 billion in 2022 to less than $360 million in 2024. Direct cyber premiums rose modestly.

The number of affirmative cyber policies written by the island’s insurers also grew, reaching more than 1.5 million policies in 2024, up from one million in 2023 and just 200,000 in 2021.

Bermuda’s role in cyber-risk transfer is extending beyond traditional insurance. The report notes that $798.75 million in cyber protection capacity was provided through Bermudian-based catastrophe bonds and insurance-linked securities at the end of 2024.

“Bermuda’s commitment to innovation and transparency sets a benchmark for global best practice in cyber insurance,” the authority said.

The BMA added that ongoing regulatory enhancements, including stress testing and tighter controls on so-called “silent cyber” exposure, are aimed at ensuring the market stays resilient as cyber-risks evolve.