LMA5567A/B: A 2026 Market Update

For the best part of a decade, the cyber insurance market has grappled with the war exclusion. Originally drafted to address kinetic conflict and territorial aggression, these traditional clauses proved fundamentally unsuited to a threat landscape defined by state-proxy actors and non-physical hostilities. This disconnect reached a breaking point with the Merck v. Ace litigation, where the ambiguity of ‘warlike action’ in a digital context exposed a critical lack of contract certainty across the Lloyd’s and company markets.

The core question was historically binary: Is this war, or is it not? However, in a threat landscape defined by ‘grey zone’ operations, this binary framing created unsustainable underwriting volatility.