Cyber Insurance Market Poised for Significant Growth, Set to Reach $23 Billion by 2025

The Insurance Information Institute’s latest Issues Brief reveals a substantial projected increase in global cyber insurance direct written premiums, expected to hit $23 billion by 2025, with U.S. businesses contributing approximately 56% of this total. This growth is driven by the ever-present threat of data breaches and cyberattacks, alongside advancements made by insurers in defining policy coverage and exclusions. This clarity has enhanced risk managers’ grasp of the product’s value, aiding insurers in better managing costs and ensuring rate stability.

The rising reliance of U.S. companies on Internet of Things (IoT) technologies, the expansion of remote work, and an increased usage of cloud data storage have expanded their exposure to cyber threats. The briefing underscores the importance of standalone cyber insurance policies in mitigating the financial impact of data breaches and cyberattacks, covering aspects not typically included under general liability policies.

The report also notes the tripled volume of the global cyber insurance market over the past five years, reflecting a heightened focus from the National Association of Insurance Commissioners (NAIC) and the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA). Insurers are improving underwriting processes and policy precision, yet the demand for more comprehensive data on cyber incidents remains to enhance liability prediction and management.