January 20, 2025 | JacobiJournal.com — Cyber Insurance: As cyber risks evolve, the insurance market is set to expand, with stable rates and ample capacity expected in 2025. A recent Gallagher report highlights increasing competition among insurance carriers, resulting in higher policy limits, enhanced risk management services, and more flexible insurance applications.
Market Growth and Projections
Gallagher’s 2025 Cyber Insurance Market Conditions Outlook reveals significant growth in the global cyber insurance market. Premiums have more than doubled over five years, reaching $14 billion in 2023, with projections of $29 billion by 2027.
John Farley, managing director of cyber at Gallagher, noted, “While we have reached a period of relative calm, the market faces storm clouds around current and emerging claims concerns.”
Emerging Cyber Threats
Cyber insurers are now focusing on new threats such as ransomware, social engineering losses, and attacks on supply chain providers. They are also preparing for losses from wrongful data collection and potential risks tied to generative artificial intelligence (AI).
In 2024, data breach costs soared to an average of $4.9 million—a 10% increase from the previous year. Investment fraud, particularly involving cryptocurrency, surged, with losses climbing from $3.31 billion in 2022 to $4.57 billion in 2023.
Cyber Insurance Adapts
The dynamic cyber threat landscape demands innovative responses from insurers. They are developing new policy language and strategies to address supply chain, regulatory, wrongful data collection, and AI-related risks. Reinsurance continues to play a crucial role, offering new capacity and support through capital markets, insurance-linked securities, and catastrophe bonds.
Despite these evolving threats, the cyber insurance market is expected to expand steadily in 2025, with the industry refining its strategies to mitigate risks effectively.
For the original report, see Gallagher’s 2025 Cyber Insurance Market Conditions Outlook.
FAQs: Cyber Insurance Market Outlook 2025
What is driving growth in cyber insurance in 2025?
Cyber insurance is growing due to higher cybercrime costs, especially from ransomware, supply chain attacks, and AI-related risks. Premiums are projected to reach $29 billion by 2027.
How are insurers adapting to new cyber risk challenges?
Carriers are updating policies, boosting reinsurance, and offering stronger risk management services to address breaches, phishing, and wrongful data collection claims.
What role does reinsurance play in cyber insurance coverage?
Reinsurance provides capacity and stability for insurers, using insurance-linked securities and catastrophe bonds to manage large-scale cyber events.
Why should businesses monitor cyber insurance trends?
Following market trends helps organizations anticipate rising costs, strengthen coverage, and reduce financial exposure to digital threats.
What is the trend in cyber security 2025?
In 2025, cyber security is increasingly focused on emerging threats such as ransomware, AI-related vulnerabilities, and supply chain attacks. Companies are investing in stronger defenses, while insurers are offering policies that include risk management services to address these evolving challenges.
Is cyber security in demand in 2025?
Yes. The demand for cyber security expertise and coverage is rising due to growing cybercrime costs and sophisticated attacks. Businesses are seeking both technical protections and insurance solutions to mitigate potential financial losses from data breaches, phishing, and other digital threats.
What is the scope of cyber security in 2025?
The scope of cyber security extends beyond traditional IT protection. It now includes cloud security, AI-related risk management, regulatory compliance, and coverage for financial losses from cyber incidents. Insurers are expanding policy limits and offering tailored solutions for diverse business sectors.
What is the future of cyber insurance?
Cyber insurance is projected to grow steadily, with global premiums expected to reach $29 billion by 2027. The market will continue to adapt to new threats, offering flexible coverage, enhanced risk management services, and innovative solutions for businesses facing digital risks.
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