Cyber Insurance Growth Accelerates Despite Evolving Risks and Underinsurance

The cyber insurance sector is expanding rapidly in 2025, yet businesses face growing complexity in both coverage and risk. Global cyber premiums reached approximately US $16.6 billion in 2024, and are projected to reach US $16.5 billion or more in 2025, with expectations to double by 2030 to over US $32 billion—driven by escalating ransomware, data breaches, and tighter regulations Risk &

Despite strong demand, the market is stabilizing. Premium rates have softened since the 2021–2022 spike, and insurers are now applying more dynamic pricing based on real-time risk posture, cyber hygiene, and regulatory compliance. AI-based continuous underwriting and loss intelligence from incidence response partners help refine this evolving risk landscape

Demand remains uneven. In Europe, regulatory frameworks such as GDPR, NIS2, and emerging laws—like the UK’s Cyber Security and Resilience Bill—are increasing cyber insurance adoption among larger enterprises and regulated sectors. However, in the UK and other markets, SMEs still exhibit penetration rates of just 5–10%, creating massive protection gaps

The cyber insurance sector is experiencing rapid expansion throughout 2025, yet businesses are increasingly confronted with growing complexity in both the scope of coverage and the nature of risk involved. Global cyber insurance premiums reached approximately US $16.6 billion in 2024, and forecasts predict that this figure will remain steady or slightly increase to US $16.5 billion or more in 2025. Furthermore, industry analysts expect the market to double by 2030, surpassing US $32 billion, driven primarily by the escalating frequency and severity of ransomware attacks, widespread data breaches, and the implementation of increasingly stringent regulatory requirements

Despite the strong and sustained demand for cyber insurance products, the market is currently stabilizing after previous volatility. Premium rates, which surged significantly during the 2021–2022 period, have softened somewhat, reflecting a more balanced risk environment. Insurers are increasingly adopting dynamic pricing models that adjust coverage costs based on real-time assessments of risk posture, cyber hygiene practices, and compliance with regulatory standards. The integration of AI-driven continuous underwriting processes and enhanced loss intelligence gathered from incident response partners is playing a critical role in refining this rapidly evolving risk landscape.

Demand for cyber insurance remains uneven across different regions and sectors. In Europe, comprehensive regulatory frameworks such as GDPR, NIS2, and emerging legislation like the UK’s Cyber Security and Resilience Bill are driving increased adoption of cyber insurance, particularly among larger enterprises and highly regulated industries

However, within the UK and other key markets, small and medium-sized enterprises (SMEs) continue to exhibit relatively low penetration rates, with only about 5–10% of these businesses purchasing cyber insurance. This significant underinsurance results in massive protection gaps across the SME sector

To address these protection gaps, insurers are increasingly offering bundled solutions that go beyond traditional cyber insurance coverage. These packages now commonly include business interruption insurance, third-party liability protection, reimbursement for regulatory fines, and incident monitoring tools. Additionally, alternative capital solutions, such as cyber-linked catastrophe bonds, are playing a growing role in boosting available capacity and reshaping the models used for transferring cyber risk

Companies that are actively seeking comprehensive cyber coverage should prioritize strengthening core cybersecurity measures such as implementing multi-factor authentication, enhancing staff awareness to combat phishing attacks, developing detailed incident response plans, and improving vendor governance practices. Insurers are now closely evaluating these factors during their underwriting process, and organizations that demonstrate a robust cybersecurity posture are increasingly likely to benefit from lower premiums and access to integrated value-added services.

Companies seeking cyber coverage should focus on improving multi-factor authentication, staff phishing awareness, incident response plans, and vendor governance. Insurers now evaluate these factors during underwriting, and firms demonstrating robust cybersecurity posture may benefit from lower premiums and integrated services.