Cyber and E&O Market Conditions Remain Favorable Amid Emerging Global Risks

Cyber and E&O Market Conditions Remain Favorable Amid Emerging Global Risks
April 4, 2025 8 mins

Cyber and E&O Market Conditions Remain Favorable Amid Emerging Global Risks

Cyber and E&O Market Conditions Remain Favorable Amid Emerging Global Risks

Despite higher claims frequency, the cyber and tech E&O markets remain in a favorable pricing and well-capitalized environment. However, buyers must remain vigilant and manage a variety of current and emerging cyber risks and threat actor attack methods.

Key Takeaways
  1. Although cyber incidents increased in 2024, the cyber and E&O markets remain competitive, offering a variety of flexible options.
  2. Businesses have continued to enhance their cyber controls, resulting in positive impacts on terms, retention and pricing. However, risks still exist that threat actors may exploit.
  3. Insurers are closely monitoring the loss development from several major events over the past two years, but the market is expected to remain buyer friendly in 2025.

The cyber and tech errors and omissions (E&O) markets remained competitive in 2024. This is despite a higher frequency of cyber claims, growing underwriting concerns over loss development from prior years, and current and emerging cyber risks.

Organizations have invested in better cyber preparedness, helping to reduce claim payments by as much as 77 percent in the U.S. alone, according to Aon data. This has led to a competitive global market that is entering its third year in 2025 with no signs of abating.

However, even as organizations continue to enhance cyber controls, risks still exist. “We have a more tense global geopolitical climate, emerging attack methods and unprecedented technological advancements, which in theory may initiate more complex and severe activity for insureds and insurers to navigate,” says Brent Rieth, head of Cyber Solutions in North America. “There is concern that claims are developing unfavorably and could get worse over the next few years.”

The Market Remains Competitive Globally

  • Europe, the Middle East and Africa

    Cyber risks in the E&O insurance market in Europe, the Middle East and Africa (EMEA) are evolving. As a result, there is increasing demand for cyber risk and E&O insurance, with companies seeking to mitigate risks associated with data breaches, ransomware and other cyber incidents.

    “A number of near-systemic global loss events in 2024 did not significantly impact loss ratios,” says Soren Stryger, chief cyber broking officer in Europe, the Middle East and Africa. “Rates continue to decline, and the market is expected to remain competitive in the first half of 2025, as new carriers will likely bring additional capacity into the EMEA market.”

    Accurate data on pricing trends and capacity changes will be crucial in understanding the market's future trajectory. “The EMEA market remains highly competitive. We have seen incumbent insurers fighting to retain renewals, expand capacity and move down towers along with top-down pressure from non-incumbent carriers competing for places on programs,” says Alexander Curtis, executive director for Cyber and E&O in Europe, the Middle East and Africa.

  • North America

    Despite an increase in claims frequency in 2024 and poor loss development in prior years claims, buyer's market conditions continued through 2024 for cyber liability insurance amid a well-capitalized and competitive environment. 

    • On average, cyber premiums fell 6.7 percent in 2024, according to Aon data. Abundant capacity has also led to a favorable January 1, 2025 reinsurance cycle, and an extension of buyer-friendly market conditions into the first half of 2025.
    • Insureds are continuing to use cyber modeling to evaluate their cyber purchasing decisions and determine the appropriate limit levels. In 2024, 21 percent of Aon’s cyber insurance purchasers added limits to their program.

    “We saw pricing continue to decrease, but those decreases started to stabilize at the end of 2024,” says Matt Chmel, chief broking officer, Cyber Solutions in North America. “What primarily drove the decreases was the marketing of excess placements in the national accounts segment, where there is a lot of capacity and competition.”

    The Canadian cyber market, meanwhile, experienced more significant rate deterioration compared to the U.S. in 2024, decreasing 13.5 percent across Aon’s portfolio.

    “And in 2025, we are still in an extremely soft rate environment,” says Katie Andruchow, Cyber Broking practice leader in Canada. “Insurers continue to agree to rate reductions as new entrants continue to pressurize the marketplace.”

2020-2024 Cyber Premium Changes by Quarter
Cyber Monthly Pricing All Layers

Current and Emerging Cyber and E&O Risks 

The following key trends are shaping the current and future cyber and E&O risk environment:

Artificial Intelligence: Advancements in artificial intelligence (AI) have helped cyber criminals automate and scale attacks, especially those involving social engineering. Even further, its use among threat actors is expected to increase in 2025. Insurers are interested in knowing how organizations are using AI to strengthen and expand their cyber security. 

Global IT and Supplier Outages: 2024 witnessed several potentially catastrophic cyber events. The full financial impact of these on the global cyber insurance market remains unknown. In 2025, cyber insurers are expected to intensify their scrutiny regarding the use of supply chain vendors and cyber security platforms.

Privacy Litigation: Insurers continue to review policy language and coverage concerning wrongful or unlawful data collection. Privacy liability exposures will evolve as privacy laws are added, updated and used in enforcement activity or civil litigation. Aon has observed a rise in privacy claims related to website tracking, pixel tracking and legislation, including the Illinois Biometric Information Privacy Act (BIPA).

Ransomware: Ransomware incident frequency remains high, with the software supply chain being a recurring target for threat actors. Dependent business interruption poses a significant concern for insurers, as large vendor incidents can trigger numerous policies from a single event. Insurers are continuing to address the challenges of underwriting systemic events that could lead to aggregation issues. 

Cloud Security Breaches: While cloud services have become integral to modern business operations, they also present significant cyber risks. Breaches in cloud security can lead to data loss, financial loss and reputational harm. In 2024, the number of new and unattributed cloud intrusions increased by 26 percent compared to 2023.1

IoT Device Vulnerabilities: The widespread adoption of IoT devices has created new opportunities for cyber threats. Attackers can exploit vulnerabilities in these devices to gain unauthorized access to networks and systems.

Quote icon

A number of near-systemic global loss events in 2024 did not significantly impact loss ratios.

Søren Stryger
Chief Cyber Broking Officer, Europe, the Middle East and Africa

As Controls Improve, Businesses Must Remain Vigilant

As underwriters continue to assess clients’ cyber security measures and controls, businesses have made improvements, leading to reduced retention, better pricing and enhanced terms.

According to Aon CyQu Red Flags data, U.S. renewal clients achieved a 9 percent year-over-year improvement in critical security controls, which may impact insurability. Notable year-over-year advancements include:

  • 15 percent in financial institutions
  • 14 percent in healthcare providers and services
  • 12 percent in industrials and manufacturing

However, continual vigilance is essential in an ever-evolving cyber landscape. Key components of a robust cyber posture include vulnerability scans, tabletop exercises and multi-factor authentication.

Aon’s data also reveals ongoing efforts to build cyber hygiene:

77%

Reduction in U.S. cyber claim payments in 2024

Source: Aon data

  • 57%

    Among global and enterprise U.S. clients surveyed, 57 percent reported vulnerability scans covering less than 100 percent of the enterprise. Nearly 30 percent indicated that backups are not stored in a secondary data center.

  • 60%

    Among middle market U.S. clients, nearly 60 percent had no tabletop exercise in 2024, and almost half failed to store backups in a secondary data center location.

“Clients are generally better prepared to handle incidents now than they were five years ago,” says Pablo Constenla, head of Cyber Coverage and Claims in Europe, the Middle East and Africa. “For instance, the world responded very well to CrowdStrike, which could have been a massive issue but wasn’t, because clients were ready to address it.”

5 Strategies to Enhance your Cyber Security Program

As cyber risks continue to evolve, companies need actionable insights and solutions to enhance their cyber risk strategies.

“Exposures will change constantly. Even if you have improved your cyber security, it is crucial to reinvest a portion of the premium savings to build a sustainable long-term cyber risk program,” adds Constenla. “This is an opportunity to plan ahead, ensuring you collaborate with the right partners, and have appropriate coverages and policy wording.”

The global CrowdStrike outage in 2024, while non-malicious, was a wake-up call. It prompted businesses of all sizes to review and bolster their cyber risk programs in preparation for more significant events.

These five strategies can help improve your company's cyber risk management program:

  1. Put your incident response plans to the test.
  2. Consider legal implications and consequences.
  3. Understand your cyber coverage and claims.
  4. Define your claims and gather evidence.
  5. Strengthen your response to incidents.

Learn more about how your business can benefit from Aon’s cyber risk solutions.

 

1 Crowdstrike 2025 Global Threat Report, Crowdstrike

Aon’s Thought Leaders

Katie Andruchow
Cyber Broking Practice Leader, Canada 

Matt Chmel
Chief Broking Officer, Cyber Solutions, North America

Pablo Constenla
Head of Cyber Coverage and Claims, Europe, the Middle East and Africa

Karrieann Couture
Cyber and Professional Liability Claims Leader, North America

Alexander Curtis
Executive Director, Cyber and E&O, Europe, the Middle East and Africa

Brent Rieth
Head of Cyber Solutions, North America

Ady Sharma
Cyber Growth Leader, Canada

Greg Sparacio
Middle Market Leader, Cyber Solutions, United States

Soren Stryger
Chief Cyber Broking Officer,  Europe, the Middle East and Africa

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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