Cyber insurance premiums to hit $23b by 2026

S&P anticipates APAC to have one of the fastest growth rates.

The global cyber insurance sector is likely to witness an increase of 15% to 20% in premiums annually, to a total of $23b by 2026, up from the $14b end of 2023, according to S&P Global Ratings.

"Cyber Insurance Market Outlook 2025: Cycle Management Will Be Key To Sustaining Profits," said that both cyber primary insurance and reinsurance markets currently have solid margins, supporting S&P’s view that the industry is stable, despite growing competition and the increasing sophistication, severity, and frequency of cyber incidents.

"Cyber insurers will help guide policyholder refinements to their cyber security frameworks over the next two years, whilst ensuring concise policy wording and pursuing selective rate adjustments to preserve adequate margins," S&P Global Ratings analyst Manuel Adam, said in a note.

Asia Pacific’s compound annual growth rate (CAGR) in primary insurance from 2019 to 2023 was 68%, whilst CAGR in reinsurance was 69%.

“In the primary cyber insurance market, Latin America and Asia Pacific have witnessed the highest growth rates in premiums over the past five years. Cyber insurance markets are larger and more mature in North America and Western Europe, which explains the lower growth rates in these markets,” the S&P report said.

To sustain profitability and meet increasing demand, the cyber re/insurance industry is urged to prioritise key actions. 

These include encouraging policyholders to strengthen cybersecurity measures, maintaining clear and precise policy wording, selectively adjusting rates, and carefully managing retentions and coverage limits.