M&A activity could reduce cyber market capacity: Marsh’s Konyar

Recent mergers and acquisitions (M&A) among major re/insurers are creating “seeds of concern” for the cyber insurance market, with experts warning that capacity consolidation could eventually reduce market availability.

Gamze Konyar, Head of Cyber, Marsh Europe, has highlighted that while the current market remains soft, the long-term implications of re/insurer consolidation are becoming impossible to ignore.

“If we take a closer look at the current market dynamics, we can see there are some seeds of concern that we actually need to keep in mind. Recent mergers and acquisitions among insurers are actually leading to capacity consolidation. This means that over time this could potentially reduce the overall capacity in the market,” she stated at the Marsh Europe H2 2025 Cyber Market Update webinar.

At the same time, the market is also experiencing a rise in major systemic events, as well as the continuing evolution of ransomware, which are adding pressure on the market.

Despite these headwinds, Konyar notes that the market has not yet reached a negative turning point. The resilience is largely driven by a continuous influx of new capital.

“Despite these challenges, there are also signs that show that we’re not there yet at a turning point in the market,” she said. “Why? Because new insurers keep entering the market, adding fresh capacity and competition. The reinsurance market remains soft, supporting capacity availability. There are consistent guidelines, carriers feel comfortable with the risk maturity, and our security controls keep improving in most organic organisations.”

Additionally, there is notable growth in excess layers facilities and insurance consortiums, which will guarantee enough capacity and more buyers are entering the markets, leading to the expansion of the insurance ecosystem, explained the executive.

Looking ahead, the outlook remains cautiously optimistic, Konyar noted. Rate decreases are expected to persist through the end of 2025, reflective of competitive conditions.

Konyar anticipates that this soft market environment will extend into the first and second quarters of 2026.

However, third-party cyber risk is projected to become a major concern for both underwriters and companies, particularly regarding digital supply chains.

Furthermore, the convergence of new technologies is also expected to drive volatility in the claims environment, and regulatory environments will keep pressing the market.

As the market continues to evolve, Adrian Cox, the CEO of Beazley, one of the world’s largest writers of cyber insurance, recently described the US cyber insurance market as unprofitable.

“We do find the lack of market discipline in North America somewhat surprising given the claims environment. This does need to adjust if we are to avoid the extreme swings in pricing that we saw in 2021 and 2022,” he said.