Cyber insurance outlook stable, supported by new capital and regulation

Growth is expected to be driven by SMEs in Asia and Europe.

The global cyber insurance segment is expected to maintain stable growth in 2025, supported by strong demand, regulatory pressures, and advances in risk selection technologies, according to AM Best.

Whilst the market has softened since 2023 due to heightened competition and falling rates, global premiums rose 7% to $15.3b in 2024 and are projected to grow more than 10% annually through 2030. 

Growth is expected to be driven by increasing awareness of cyber risks, particularly amongst small and medium-sized enterprises, and expanding adoption in underpenetrated regions such as Europe and Asia.

Despite rising threats such as ransomware, business email compromise, and AI-powered cyberattacks, insurers are responding with improved underwriting practices and broader use of AI and continuous monitoring. 

Reinsurers and alternative capital sources, including cyber catastrophe bonds, are also increasing capacity, with over $750m deployed in 2024.

However, systemic risk remains a key challenge, as large-scale outages and cascading losses across digital infrastructure threaten insurers’ ability to model and absorb losses.

Insurers themselves are also becoming frequent targets due to their large stores of client data.

The outlook remains stable, with profitability expected to hold despite competitive pressure, and regulatory standards continuing to drive cyber insurance adoption across sectors.