The UK insurance market showed significant softening in 2024, according to Aon’s UK Insurance Market Outlook. The report highlights key factors of insurer profitability, increased market capacity, and intense competition. These resulted in more favorable conditions for buyers across most sectors. Turning to cyber insurance. The UK cyber insurance market emerged as a standout area for reductions and strategic focus. Factors in this included cybersecurity efforts resulting in greater cyber resilience, coverage, ransomware payments and threats, and systemic cyber risks.
Cybersecurity Insurance Market: Lower Premiums, Higher Stakes
As outlined in Aon’s analysis, cyber insurance clients enjoyed premium reductions of between 11% and 20% in 2024. These lower costs came despite a rise in ransomware attack frequency. Also of note, ransomware payments dropped 35% year-over-year. This indicates businesses are more resilient to the attacks and better prepared to engage in recovery.
Business interruption risks, including dependencies on third-party vendors, remained central concerns for insurers. Yet, underwriting became more flexible. It seems obvious, but while we trust, we verify. Clients demonstrating strong cyber hygiene and proactive risk management benefited from increased limits, broader coverage, and reduced deductibles.
Systemic Cyber Risk Remains a Watchpoint
Aon’s outlook warns that insurers remain cautious about systemic risks, emerging technologies such as AI, and inflationary pressures on claim costs. The outlook notes, robust data use, and early broker engagement were critical success factors in cyber insurance renewals.
2025 Outlook: Soft Market May Persist, but Not Guaranteed
The UK cyber insurance market may continue to offer savings in 2025. But, and it’s a big issue, insurers worry about systemic threats. If they play out, there could be a swift tightening of the market. Cyber threats remain dynamic and are evolving rapidly, and clients are encouraged to be proactive in their cyber risk practices.
Other News: 2025 Cyber Insurance Outlook: Evolving Risks and Stabilizing Market Trends(Opens in a new browser tab)
