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The global cyber insurance market size is positioned for strong long-term growth, but competitive challenges are increasing for re/insuers, according to recent analyses from Market Research Future and S&P Global Ratings.
According to a Market Research Future report, the cyber insurance market size is projected to expand from $13.13 billion in 2024 to $126.89 billion by 2035, reflecting a compound annual growth rate (CAGR) of 22.9% over the period. This trajectory is driven primarily by escalating cyberattacks, including ransomware; stricter regulatory requirements for data protection; and accelerating digital transformation involving cloud computing, Internet of Things (IoT), and artificial intelligence (AI). Check out our coverage of other cyber insurance market size reports here.
Regional Cyber Insurance Market Size
Growth of the cyber liability insurance market size varies across segments, according to the report. Coverage types include data breach insurance, network security insurance, business interruption insurance, cyber extortion insurance, and errors & omissions policies. Demand is particularly strong in sectors handling sensitive data, with banking, financial services, and insurance leading adoption, followed by healthcare and life sciences, IT and telecom, retail and e-commerce, government and public sector, manufacturing, and energy and utilities.
Regionally, according to the Market Research Future report, North America dominants global markets due to high risk awareness and advanced insurance infrastructure. Europe benefits from compliance-driven demand under regulations such as GDPR. Asia-Pacific emerges as the fastest-growing region, supported by rapid digital transformation and increasing cyber threats in emerging economies. Steady growth is observed across Latin America, the Middle East, and Africa (categorized as Rest of the World).
In contrast, S&P Global Ratings’ outlook for 2026 emphasizes stability in the current cycle, with the cyber insurance market size reflecting resilient premiums. Insurers demonstrate resilient earnings, supported by disciplined underwriting, robust reinsurance arrangements, and advanced risk modeling. Global cyber insurance premiums reached $15.3 billion in 2024, marking an all-time high despite moderated growth from prior years, according to the S&P Global Ratings report.
Cyber insurance claims frequency and severity declined notably, with a 53% drop in cyber insurance claims during the first half of 2025 compared to the same period in 2024, as cited in the S&P report. This improvement stems from enhanced policyholder security controls and stricter policy terms, including exclusions for inadequate protections such as multi-factor authentication.
Competitive Pressure Slows Growth of Cyber Insurance Premiums
However, intensifying competition contributes to weakening rate momentum, particularly in the U.S. and parts of Europe, according to the S&P Global Ratings report. Premium growth is anticipated at 5%-10% annually over the next three years, with potential upside from expansion into small and medium-sized enterprises (SMEs) or downside from further rate softening or coverage broadening.
Watch our Podcast – Cyber Insurance Market Reality Check with Willis’ Peter Foster
Opportunities persist in underpenetrated markets, as noted in the S&P Global Ratings report. SMEs represent significant untapped potential, as do regions like Asia-Pacific and Latin America, where historical growth rates have exceeded global averages. Risks include margin erosion from pricing pressures, evolving threats such as AI-enabled attacks and supply chain vulnerabilities, and potential systemic events.
Role of Cyber Reinsurance & Insurance-Linked-Securities
S&P emphasizes that reinsurance is critically important for the sector’s growth and stability. Primary insurers ceded around 44% of cyber premiums to reinsurers in 2024, enabling better risk diversification, balance sheet protection, and higher policy limits.
Reinsurers have seen strong profitability recovery, with net combined ratios improving to 88% in 2024, thanks to disciplined underwriting and a shift toward excess-of-loss treaties, according to the report. S&P expects robust results to continue through 2025-2026, underpinning the industry’s resilience amid rising threats. Insurance-Linked Securities (ILS) issuance remained subdued in 2025, according to S&P, with only three public cyber cat bonds (renewals from Hannover Re, Beazley, and Chubb). Abundant traditional reinsurance capacity has limited new activity. However, S&P views cyber ILS as an effective alternative capital solution for transferring large-scale systemic risks, with potential upside if traditional capacity tightens.
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Still a Niche Market with Opportunities for Expansion
Cyber remains a niche line, representing less than 1% of global property/casualty premiums, according to S&P. Penetration is highest in the mature U.S. market, with significant untapped potential in underpenetrated regions like Asia-Pacific, Latin America, and Central/Eastern Europe—especially for small- and medium-sized enterprises (SMEs), the report concludes.
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