Cyber Insurance Market Poised: As cyber risks evolve, the cyber insurance market is set to expand, with stable rates and ample capacity expected in 2025. A recent Gallagher report highlights increasing competition among cyber 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. Cyber Insurance Market Poised
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.
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For the original report, see Gallagher’s 2025 Cyber Insurance Market Conditions Outlook.