AM Best: stable outlook for the global cyber insurance market

AM Best has reaffirmed its stable outlook for the global cyber insurance market.

The rating agency notes that strong demand for cyber insurance coverage is expected to continue, supporting profitability across the sector despite intensifying competition.

The small and medium-sized enterprise (SME) segment presents a key growth opportunity, as many SMEs remain underinsured or lack sufficient cyber coverage. Rising awareness of cyber threats has also led policyholders to enhance their IT security measures, helping reduce potential losses in the event of a claim.

AM Best's outlook is further supported by several factors, including sustained capital inflows from reinsurers and alternative capital providers, the use of artificial intelligence for more effective risk selection, and favorable regulatory developments.

According to Munich Re, global cyber insurance premiums reached 15.3 billion USD in 2024, climbing 7% year-on-year. The market is projected to grow at an average annual rate exceeding 10% through 2030.

However, the industry continues to grapple with challenges such as a rise in ransomware attacks, business email compromise, and payment fraud. The growing use of AI by cybercriminals is also amplifying the scale and sophistication of such attacks.