Global cyber insurance premiums are projected to grow at an annual rate of 15% to 20%, reaching $23 billion by 2026, up from $14 billion in 2023, according to a new report from S&P Global Ratings.
The report, titled Cyber Insurance Market Outlook 2025: Cycle Management Will Be Key To Sustaining Profits, highlights the sector’s solid margins in both primary insurance and reinsurance markets, reinforcing S&P’s assessment that the industry remains stable despite rising competition and the increasing complexity, frequency, and severity of cyber incidents.
Manuel Adam, an analyst at S&P Global Ratings, emphasized that cyber insurers will play a crucial role in helping policyholders enhance their cybersecurity frameworks over the next two years. This, alongside clear policy wording and selective rate adjustments, will be essential for maintaining healthy margins in a competitive market.
S&P also noted that the Asia-Pacific region has seen some of the fastest growth in cyber insurance premiums. From 2019 to 2023, primary insurance premiums in the region grew at a compound annual growth rate (CAGR) of 68%, while reinsurance premiums grew by 69%. In comparison, North America and Western Europe, where cyber insurance markets are more established, have experienced slower growth rates.
The report further underscores that Latin America and Asia Pacific have been key drivers of premium growth in the primary cyber insurance market. However, markets in North America and Western Europe, being more mature, have seen relatively modest growth.
To maintain profitability amidst rising demand, the cyber insurance and reinsurance sectors are urged to focus on several critical actions. These include advising policyholders to strengthen their cybersecurity measures, ensuring policy terms are clear and precise, selectively adjusting premiums, and carefully managing coverage limits and retentions.
As the cyber threat landscape continues to evolve, these strategic actions will be vital for insurers to effectively navigate the growing market and sustain long-term profitability.
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