Efficient reinsurance structures key for 1.1 cyber renewals: Gallagher Re

As per Gallagher Re’s 1st View report, the cyber renewals at 1.1 2025 focused on securing the most efficient reinsurance structures amid “extremely healthy” levels of capacity from reinsurers and an improved understanding of tail risk from buyers.

The cyber section of the reinsurance broker’s report highlighted heightened competition for both quota share and excess of loss placements at 1.1, which reportedly resulted in successful negotiations for better terms and more effective coverage.

“In the proportional market, it was a buyers’ market as supply outstripped demand. This was driven by a lack of underlying growth, increased retentions and increasing reinsurer appetite,” Gallagher Re said.

The reinsurance broker continued, “As portfolios become more balanced, the work carried out during 2024 by buyers and Gallagher Re to create greater confidence around systemic risk bore fruit as buyers’ strategies notably changed transitioning from the tail and moving structures to further down the risk curve, which offered greater value.”

According to the firm’s report, the resulting structures are more efficient in terms of attachment and price and represent bespoke products that are more appropriate for buyers’ specific needs.

Gallagher Re’s 1st View also highlighted a shift away from the intense focus on cyber warfare, which had been a major topic during the 1.1 2024 discussions.

“While the market is progressing towards reaching consensus on cyber war, we now have a clearer picture on the direction of travel as well as which underwriters are supporting a broader range of exclusionary language,” the firm said.

In related news, last week, Reinsurance News covered Gallagher’s global property reinsurance renewals section of its 1st View report.

The reinsurance broker noted that these were largely orderly. Although reduced risk-adjusted pricing was greater than many sellers planned for, it was “entirely rational and expected” given the plentiful capacity and robust results for 2024.

We also spoke with Tom Wakefield, the firm’s Chief Executive Officer, who observed that reinsurers view the current market as an attractive space, even after some moderation in terms and conditions.

However, they reportedly face ongoing pressure to deliver strong results amid a renewal season marked by variability and diverse outcomes.

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