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Falling premiums reshape the cyber insurance landscape

Insurers compete fiercely by offering broader cover and more service, but experts warn that rising claims and evolving threats could undermine the market’s newfound stability

Jeffrey Gonlin

Emergence

Industry experts

Michael Lewis

CFC

Trent Nihill

Coalition

Richard Smith

Sync Underwriting

Jeff Gonlin began his insurance career in 1980 in the US, underwriting a full spectrum of casualty business. After gaining extensive experience internationally, Gonlin sought a fresh and fun opportunity. He joined Emergence in 2016, drawn by the dynamic field of cyber insurance and Emergence’s innovative approach. As chief underwriting officer at Emergence, Gonlin’s mission is to assess and manage cyber risks, shaping and growing the organisation while navigating the dynamic risk landscape. Gonlin is leaving his fingerprints on the products Emergence is developing, playing a crucial role in realising Emergence’s vision and ensuring the company’s ongoing success in the cyber insurance sector.

Emergence

Jeffrey Gonlin

As cyber development manager, Michael Lewis supports CFC’s strategy for driving growth and innovation throughout the Australian market while providing valuable solutions to clients facing the cyber threat landscape. He serves as a key contact for brokers in Australia, providing in-person education and broker training to help build confidence in cyber risks. A seasoned insurance professional, Lewis has 15 years’ experience across underwriting, cyber and business development. He began his career in underwriting before transitioning into the world of business development, where he worked with both large insurers and underwriting agencies.

CFC

Michael Lewis

Trent Nihill is a seasoned risk professional with nearly two decades of experience in the Australian and London insurance markets. For the past seven years, he has focused exclusively on cyber insurance underwriting. Nihill currently serves as head of underwriting, Australia, at Coalition, where he was one of the first local hires. Prior to this role, he held positions of increasing responsibility at domestic and international carriers and agencies.

Coalition

Trent Nihill

Richard Smith has experience in both the London and Australian markets, having held senior roles across Lloyd’s syndicates, underwriting agencies and broking businesses. Over the last seven years, Smith’s sole focus has been on cyber insurance, developing personal as well as commercial cyber products for the Australian market and successfully growing and managing profitable portfolios for underwriters. Guided by his deep industry knowledge, Smith is unwavering in his belief that now is a critical time for brokers to grasp the enormous cyber insurance opportunity and is committed to developing Sync cyber products to support them.

Sync Underwriting

Richard Smith

“I think we’d all agree that, from a pricing perspective, the market is very, very competitive at the moment”

Richard Smith, Sync Underwriting

NOT SO long ago, cyber insurance was a fortress – premiums were climbing, coverage shrinking, and buyers were forced to accept what they could get. Now, the gates have swung open. New entrants are pouring in, established players jostle for position, and once-stubborn price tags are falling. For the first time in years, buyers find themselves courted, not cornered, as the market’s pendulum swings decisively in their favour. After years of hardening conditions, Australia’s cyber insurance market has entered a pronounced soft phase, marked by intensifying competition, falling premiums and broader coverage. According to a recent Marsh report, cyber premiums declined by 5–15% in the first half of 2025, reflecting abundant local and international capacity and a buyer-friendly environment. This rapid transformation raises questions about sustainability, transparency and the future direction of a market still maturing in the face of fast-evolving digital threats. Insurance Business TV spoke to experts in the area at a recent Executive Insights panel to hear their views. “I think we’d all agree that, from a pricing perspective, the market is very, very competitive at the moment,” said Richard Smith, chief executive of Sync Underwriting. Smith believes current market conditions will persist because “the majority of the cyber insurers in the Australian market believe that they can provide underwriting profitability with the current market conditions”.

“Traditional underwriting is kind of like driving a car whilst looking at the rear-view mirror. You have to navigate based on what’s happened in the past. With cyber, you’re moving a lot faster”

Trent Nihill, Coalition

The rapid descent in pricing raises questions about long-term market viability. Jeffrey Gonlin, chief underwriting officer at Emergence, takes a philosophical view of market cycles, questioning whether they are as regular as that term implies. “I’d like to know who can predict cycles. Cycles kind of imply that the phenomenon has some regularity to it, which I don’t think insurance markets do,” said Gonlin. “You know, it’s an open, competitive market. There aren’t many barriers to entry, and you’re going to see what looks at times like irrational behaviour.”

The maturation of cyber as a product line contributes to pricing sophistication. “Cyber is still seen as a newer product, and traditionally, in the past, a lot of insurers will look to build in a known-unknown loading,” said Nihill. “I think it’s more mature now. We understand losses a bit better. We’re getting more data, more information. So it allows us to home in on the true actuarial price a bit better.”

Lewis argues that traditional application-based underwriting approaches prove inadequate for cyber risks. “The way that cyber is evolving, that traditional point-in-time question set is becoming a little less relevant,” he said. “It’s better to get a client on risk and then monitor their real-time exposures and identify them and help them along the journey of cybersecurity.” The interconnected nature of modern business amplifies these concerns. Over the past 18 months, local entities have faced direct impacts from overseas technology failures, including software supply chain disruptions and vendor outages. This technology interdependence represents what some analysts describe as a Faustian pact – the benefits of innovation and efficiency come at the cost of greater exposure to external shocks. Gonlin acknowledged that while forward-looking underwriting isn’t new, cyber’s pace of change makes it essential. “Good underwriting is always forward-looking. It’s a matter of degree. The world changes, and the question is how fast,” said Gonlin. “It’s just that cyber happens to move at tech speed, meaning that the half-life of useful data is just much shorter.”

Cyber security and data protection on internet

The transformation has been swift and decisive. Trent Nihill, head of underwriting in Australia at Coalition, acknowledged the reluctance to declare the market soft, but believes that position is no longer tenable. “I think last year there was hesitancy to call it a soft market. I don’t think anyone wanted to speak it into existence, but I think you can probably say we’re there now, as prices are coming down,” said Nihill. This shift reflects not merely pricing adjustments but fundamental changes in market dynamics. Michael Lewis, cyber development manager at CFC, pointed to “new competitors coming in from Australia and from overseas [alongside] a

Rapid threat escalation also poses challenges for conventional underwriting methodologies that rely heavily on historical data. Nihill characterised the problem using a driving analogy: “Traditional underwriting is kind of like driving a car whilst looking at the rear-view mirror. You have to navigate based on what’s happened in the past. With cyber, you’re moving a lot faster than other classes of insurance.” The presence of intelligent adversaries distinguishes cyber from traditional property risks. “Unlike a fire or hailstorm, in cyber we have actual adversaries on the other side looking for ways to hurt our customers more. So you’ve got an intelligent threat actor that is harder to anticipate,” said Nihill. Smith from Sync Underwriting identifies specific emerging risks that lack precedent. “Obviously, risks will continue to evolve which don’t have any historical precedent,” he said. “This adds to the underwriting complexity. For example, there’s been a lot of talk about AI and deepfakes [increasing] over the next three to five years.”

Spotlight on ransomware in Asia-Pacific

25%

resurgence in appetites from legacy markets who had previously exited or limited their desire to grow cyber in those more difficult times”. The competitive pressure extends beyond traditional pricing metrics. Nihill noted that “rather than just looking for the cheapest price, brokers are also looking at expanding cover at the same time”. Aside from coverage options expanding, market participants are also seeing insurers offering value-add services such as cyber self-assessments, risk management tools and broader wording to cover supply chain risks.

The mathematics of compound discounting particularly concern Gonlin. “You discount 10 or 15% and you do that again on renewal, then you discount another 25% – and it’s not uncommon. Next thing you know, you’ve given up half your premium,” he said. Lewis from CFC offers a measured assessment of sustainability, suggesting current conditions will remain viable provided the market stabilises. “This is a bit of a yes and no answer on this one. At the current market rates, as long as we see stabilisation … then yes, it’s sustainable,” he said. However, Lewis warned against continued deterioration. “If we continue to see trends of declining rates, then it’s not [sustainable]. We saw one example of a renewal quote that was able to attain double their limit from last year, but with a really big rate reduction. So, you know, I don’t think that’s sustainable if that keeps going,” he said. Nihill suggested current pricing reflects a correction from previous overpricing. “I think there probably was a bit of an overcorrection in the hard market a few years ago,” he said. “So whilst it seems dramatic to see 20 or 30% rate reductions on a renewal, there’s probably some justification there that that’s a more accurate price.”

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The urgency of this focus becomes clear from recent data showing a widening readiness gap: in a separate analysis, Aon found that 98% of chief risk officers feel ‘somewhat’ or ‘not ready’ to manage emerging AI-related risks. The drive to capture economic opportunities associated with new AI technologies has seen a rush to market of new products and services, often at the expense of conducting robust legal, security and risk management reviews before launch. While 79% of businesses are already using or planning to use AI tools, just 32% have a formal inventory of them. This has created a wide and unsecured digital attack surface. Smith also pointed to quantum computing and regulatory changes as areas requiring forward-looking assessment. “We’re going to see the continued progression of quantum computing risks, which are going to evolve,” he said. “I also think there’s going to be increased regulation over the next three to five years as well, with probably more immediate breach response requirements for businesses.”

Despite market maturation, policy transparency remains problematic. Smith takes a direct stance on this issue, stating simply, “I think the short answer is no [cyber policies are not transparent] – and this has been a little bit of a bugbear of mine.” He identifies specific problems with current policy language: “I do think in some of the cyber policies, the language is ambiguous. I also think some of the policies contain claims conditions and policy write-backs which aren’t transparent.” The complexity has reached concerning levels, according to Smith. “It’s even got to the stage where brokers are actually subscribing to AI platforms simply to decipher between cyber insurance policy wordings. I mean, is that really what we want?” he said.

Sync Underwriting is a cutting-edge cyber underwriting agency dedicated to servicing the needs of brokers and their clients. We are passionate about providing cyber products that have been informed by deep industry knowledge and a continual commitment to innovation. This enables us to help keep our broker partners one step ahead.

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Coalition is a leading provider of cyber insurance and security, combining comprehensive insurance and proactive cybersecurity tools to help businesses manage and mitigate cyber risk. The company created the Active Insurance category to provide active cyber risk assessment, protection, response and coverage to Australian businesses. Coalition’s cyber risk management platform provides automated security alerts, threat intelligence, expert guidance and cybersecurity tools to help businesses remain resilient in the face of cyberattacks.

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CFC is a specialist insurance provider, a pioneer in emerging risk and a market leader in cyber. Our global insurance platform uses cutting-edge technology and data science to deliver smarter, faster underwriting and protect customers from today’s most critical business risks. Headquartered in London with offices in New York, San Francisco, Austin, Toronto, Brussels, Sydney, Melbourne, Perth and Brisbane, CFC has over 1,000 employees and is trusted by more than 150,000 businesses in 90 countries.

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M&A Insights 2021

Insurance Business America uncovers the answers to brokers’ biggest questions about mergers and acquisitions, with expert insight from MarshBerry, Baldwin Risk Partners and Relation Insurance

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Trevor Baldwin

Baldwin Risk Partners

Phil Trem

MarshBerry

Timothy J. Hall

Relation Insurance

Gerard Vecchio

MarshBerry

Industry experts

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Mashberry

Gerard Vecchio

Relation Insurance

Timothy J. Hall

Mashberry

Phil Trem

Baldwin Risk Partner

Trevor Baldwin

In Partnership with

M&A Insights 2021

Insurance Business America uncovers the answers to brokers’ biggest questions about mergers and acquisitions, with expert insight from MarshBerry, Baldwin Risk Partners and Relation Insurance

Read on

Trevor Baldwin

Baldwin Risk Partners

Phil Trem

MarshBerry

Timothy J. Hall

Relation Insurance

Gerard Vecchio

MarshBerry

Industry experts

Baldwin Risk Partners

Trevor Baldwin

Mashberry

Phil Trem

Relation Insurance

Timothy J. Hall

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Mashberry

Gerard Vecchio

Market sustainability questions mount

Published 07 Oct 2025

“I don’t think we want to standardise coverages, because that hinders innovation, especially in a class of business like cyber that needs to evolve to keep pace”

Michael Lewis, CFC

“You discount 10 or 15% and you do that again on renewal, then you discount another 25% – and it’s not uncommon. Next thing you know, you’ve given up half your premium”

Jeffrey Gonlin, Emergence

Emergence is an award-winning underwriting agency, exclusively focused on providing smarter cyber insurance solutions. We help protect Australian businesses and families against the financial, commercial and reputational risks of cyber threats with comprehensive cyber coverage. Our policies are written in plain language, making them clear and accessible for all clients. Our user-friendly portal allows brokers to quote and bind policies in minutes, ensuring efficient protection against cyber threats. Navigating the complexities of cybersecurity can be daunting. Our smarter cyber services provide robust, real-time protection and expert support to effectively mitigate cyber risks. Our 24/7 in-house incident response team ensures rapid, expert handling of cyberattacks, minimising losses and restoring business operations swiftly.

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Percentage of entities paying ransoms in 2024

US$110,890

Median ransom payment in Q4 2024

response costs, business interruption loss, data recovery costs and legal liabilities

Types of claims that typically arise from ransomware include

Source: Aon 2025 Global Cyber Risk Report

Future encryption compromise

Top quantum computing security threats

Source: 2025 Thales Data Threat Report (based on global survey of 3,163 professionals in security and IT management)

Key distribution

Future decryption of today’s data

Risk of network decryption

Rise of blockchain attack

Other concerns

63%

61%

58%

48%

42%

The changes come against a background of increasing risk. Aon’s Global 2025 Cyber Risk Report reveals cyber incidents across the Asia-Pacific region have spiked 29% over the past year and 134% over four years. Social engineering, AI-powered deception and deepfake attacks are among the fastest-rising threats, driving a 233% year-on-year increase in fraud-related cyber insurance claims. The growing sophistication of threats

Traditional underwriting approaches under pressure

challenges the assumption that current soft market pricing adequately reflects underlying risk. At the same time, more familiar threats such as ransomware are ever-present.

Policy transparency concerns persist

Nihill offered a more optimistic assessment while acknowledging there’s room for improvement. “I think for the most part, I’d say they probably are transparent,” he said. “I guess insurance should never be a surprise. Clients should know where they stand, what’s covered, what’s not covered.” However, Nihill sees terminology inconsistencies as a significant challenge. “I think one of the challenges with cyber is, being a newer product, there’s probably not as much consolidation of terminology in the wordings. So contingent business interruption could be called dependent business disruption or supply chain cover in different cyber insurance policies,” he explained. Lewis emphasised the balance between transparency and innovation. He said, “I don’t think we want to standardise coverages, because that hinders innovation, especially in a class of business like cyber that needs to evolve to keep pace.” Gonlin promotes simplification as a competitive advantage. “From the start, Emergence always viewed cyber insurance as unnecessarily complicated,” he said. “We didn’t believe it had to be that way. And the mission was really to simplify it and bring cyber to the masses.”

With increasing options on the market, broker selection of cyber insurers becomes more complex. Lewis emphasised stability and longevity as key factors. “Being around for a long time and having sustainable pricing and coverage is important [alongside] comparing policy benefits, including coverage, but also the size and scope of the risk management services, [and] pre-loss services that are included for clients,” he said. Gonlin stressed the importance of specialised knowledge and comprehensive service offerings. “Look for an insurer who’s got the specialised knowledge, who knows cyber, who has the expertise, the track record of reliability,” he said. “You want somebody that offers a full suite of products and services.”

Broker selection criteria

He puts particular emphasis on service: “I think the service component is rightly becoming increasingly appreciated and important. So you want to have pre-sale, pre-loss and post-loss services to back up the policy. It’s such a service-intensive product, and the incident response in particular is absolutely essential.” Nihill advocates for proactive risk management capabilities. “What we really focus on is active insurance, so the ability to actually prevent a client from having a loss in the first place – someone that can continually monitor your systems and give you a heads-up about threat-actor activity before it can escalate into a claim,” he said. Smith highlighted the importance of insurer accessibility and support tools: “I also think tools to help brokers in explaining cyber risk exposures to their clients [are key]. For example, we provide tools which help brokers explain cyber risk exposures to their clients and how a cyber insurance policy can protect their clients from those different exposures.”

Despite market improvements, Australia is facing a threat of underinsurance regarding cyber risk. Larger businesses often have much higher rates of coverage, but one 2024 study showed that only 10-25% of SMEs hold a standalone cyber insurance policy. The level is thought to be even lower, perhaps around 5%, for micro-SMEs. This presents both a challenge and opportunity for the market. Gonlin expressed frustration with the low take-up despite market improvements. “We’re in a soft market. The products have never been better. The pricing has never been cheaper. It’s never been a better time. So some get it, but … it seems that the majority don’t,” he said.

Low adoption rates challenge growth

Nihill advocates shifting sales approaches from fear-based messaging to value demonstration. “I think it’s really about selling on value,” he said. “I think in the past, we’ve probably done a poor job of focusing too much on the scariness of cyber, saying, ‘Hey, you can have a loss’. No one’s buying out of fear; it’s really about value. How can you help the client? Why is it in their best interest to have this insurance?” Smith sees significant upside for brokers willing to focus on cyber. “For brokers, it’s an enormous revenue opportunity. Some of them have very low take-up percentages of cyber insurance in their portfolios, and if they do the numbers, we’re talking about millions of dollars of revenue,” he said. “I think they should consider … bringing in a specialist just to concentrate on cyber for their client portfolios … or

economically, if that’s not viable, a point-in-house cyber product champion.” Lewis recommends ongoing education for brokers. “There are lots of tools available that people can [use to] upskill [their cyber knowledge],” he said, as well as “the cyber underwriters that are available to help understand the risk more and ... get over the objections that come up [from clients].” The market’s growth potential remains significant, but realising that potential requires a coordinated effort by insurers and brokers to demonstrate value while simplifying the purchase process. With current soft conditions expected to persist through 2025, the ongoing rise in claims frequency and severity could shift dynamics again in 2026 and beyond.

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