Global cyber insurance premiums top $16 billion as claims rise

Beinsure says the cyber insurance market exceeded $16 billion in global premiums in 2025, while US direct written premiums rebounded to $9.46 billion. The report points to slower growth ahead as large-business claims climb, ransomware stays costly and AI-driven risk adds pressure on insurers.

Why it matters: - Cyber insurance is still growing, but the market is no longer in the breakneck expansion phase. - Rising claim severity, especially for large corporations, is putting more pressure on pricing, underwriting discipline and profitability. - AI-enabled attacks and systemic technology dependencies are increasing the risk of correlated losses across multiple insured companies.

What happened: - Beinsure's outlook said global cyber insurance premiums exceeded $16 billion in 2025. - US direct written premiums rose 3.5% to $9.46 billion, reversing the market's 2024 contraction. - The analysis draws on market data from the NAIC, AM Best, Chubb and Coalition. - Beinsure said the market's rapid expansion has eased as competition and underwriting capacity increased.

The details: - Global cyber insurance premiums more than doubled from 2017 to 2020 and again between 2020 and 2022. - Between 2017 and 2022, the market expanded at an annual rate of about 32%. - AM Best said the American market accounts for more than half of global premiums. - Including US cyber exposures insured through Lloyd's lifts that share to about 60%. - AM Best kept a stable outlook for the global cyber insurance segment. - The rating agency cited sustained demand, favorable intermediate-term profitability, improving cybersecurity practices and added reinsurance and alternative capital. - AM Best expects international markets to take a larger share of global premiums, especially in Europe, Latin America and developed Asian economies. - Small and medium-sized businesses remain a major growth area as cyber insurance penetration rises outside the US. - Beinsure identified ransomware, business email compromise, funds transfer fraud and systemic cyber risks as persistent concerns. - AI-enabled cyberattacks and autonomous systems are making loss estimation harder where multiple insured organizations rely on the same technology providers. - US cyber insurance direct written premiums included $7.46 billion from domestic insurers and about $2 billion from alien surplus lines insurers. - NAIC data showed domestic premiums rose from $2.75 billion in 2020 to $7.46 billion in 2025, equal to compound annual growth of about 22%. - Chubb remained the largest domestic US cyber insurer with $629.2 million in direct written premiums and an 8.44% market share. - Beazley moved from 16th to second place with $570.9 million and 7.65% of domestic premiums. - St Paul Travelers ranked third with about $544 million, followed by Sompo at $342 million and Tokio Marine Holdings at $319 million. - The five largest insurers controlled 32.24% of domestic US cyber premiums, while the top 10 held 51.03%. - The 20 leading insurance groups represented 76.82% of the domestic market. - Chubb reported a 58.81% loss ratio including defense and cost containment expenses. - Beazley reported a 16.28% loss ratio, Arch Insurance 41.60% and AIG 62.28%. - Beinsure said loss ratios show wide variation in claims experience across insurer portfolios, but they do not by themselves determine overall profitability. - According to Chubb's 2026 Cyber Claims Report, average claim severity among businesses with at least $1 billion in annual revenue reached about $4.4 million in 2025. - That was up from $2.2 million in 2024 and 586% higher than 2021. - Higher business interruption costs, data breach expenses and privacy litigation drove the increase. - Middle-market businesses posted average severity of $759,000, up 22.6% from $619,000 in 2024. - Smaller and mid-sized enterprises saw average losses fall 34% to about $142,000 from roughly $215,000. - Large businesses reported about 10 claims per 100 policies in 2025, down from 15 in 2024. - Middle-market claim frequency fell from around six to just above five claims per 100 policies. - Coalition's 2026 Cyber Claims Report showed a different pattern across a broader portfolio of more than 100,000 policyholders in the US, Canada, the UK, Australia and Germany. - In that dataset, overall cyber claims frequency rose 3% in 2025 while average severity fell 19% to about $116,000. - Coalition's portfolio includes more small-business exposure and is not directly comparable with Chubb's large-enterprise figures. - Ransomware remained the most expensive cyber claim category in Coalition's report. - Initial ransom demands rose about 47% year over year to an average above $1 million. - A record 86% of affected businesses refused to pay attackers, helped by stronger backups and better incident response. - Average ransomware claim severity still reached $269,000, more than twice the broader cyber claims average of $116,000. - Business interruption, system restoration and forensic investigations remained major loss drivers even when ransom payments were avoided.

Between the lines: - The market is splitting by company size. - Large enterprises are dealing with fewer but much costlier claims. - Smaller policyholders are seeing lower average losses, but they still face rising claims activity in some portfolios. - That divergence makes pricing and risk selection harder for insurers. - The outlook also suggests that cyber insurance growth will depend more on international expansion than on US market momentum alone. - Insurers with better control of accumulation risk, ransomware exposure and large-corporate underwriting may hold the strongest edge.

What's next: - Beinsure expects premium growth to stay more moderate than in prior years. - International demand should add new business as cyber insurance adoption rises outside the US. - Europe, Latin America and developed Asian markets are likely to take a larger share of global premiums. - Insurers are expected to face continued pressure from ransomware, AI-enabled attacks and shared technology dependencies. - Profitability will likely hinge on underwriting discipline, claims severity management and exposure controls across interconnected systems.

The bottom line: - Cyber insurance is still expanding, but the next phase looks more selective, more global and more dependent on managing big-loss risk.