Global cyber insurance premiums top $16B as large-business claims jump

Beinsure says the cyber insurance market passed $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 ransomware, AI-enabled attacks and higher-severity losses put more pressure on insurers.

Why it matters: - Cyber insurance is still growing, but the market is maturing. That shift matters for pricing, underwriting discipline and insurer profitability. - Large corporate claims are getting more expensive even as claim frequency eases, raising the risk of outsized losses for carriers. - AI-enabled attacks and systemic cyber exposure could increase correlated losses across many insured companies at once.

What happened: - Beinsure reviewed the latest market data from the National Association of Insurance Commissioners, AM Best, Chubb and Coalition. - Global cyber insurance premiums exceeded $16 billion in 2025. - US direct written premiums rose 3.5% to $9.46 billion in 2025, recovering from the market’s 2024 contraction. - Beinsure said the market is moving beyond the rapid expansion seen in earlier years.

The details: - Global cyber premiums doubled from 2017 to 2020 and again between 2020 and 2022. - Between 2017 and 2022, the market grew at an annual rate of about 32%. - AM Best kept a stable outlook on the global cyber insurance segment. - AM Best cited sustained demand, favorable intermediate-term profitability, improving cybersecurity practices and more reinsurance and alternative capital. - The American market accounts for more than half of global premiums. - Including US cyber exposures insured through Lloyd’s lifts the estimated US share to about 60%. - AM Best expects international markets to capture a larger share of global premiums, especially in Europe, Latin America and developed Asia. - Small and medium-sized enterprises remain a major growth opportunity as cyber insurance adoption rises outside the US. - Ransomware, business email compromise, funds transfer fraud and systemic cyber risks remain key concerns for insurers. - AI-enabled attacks and autonomous systems are making loss modeling harder, especially when many insureds rely on the same technology providers. - US domestic cyber premiums rose from $2.75 billion in 2020 to $7.46 billion in 2025, a compound annual growth rate of about 22%. - The US market includes $7.46 billion from domestic insurers and about $2 billion from alien surplus lines insurers. - 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. - The top 10 insurers held 51.03% of domestic premiums, and the top 20 groups held 76.82%. - 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%. - Chubb’s 2026 Cyber Claims Report showed average claim severity for businesses with at least $1 billion in annual revenue reached about $4.4 million in 2025. - That compares with $2.2 million in 2024 and a 586% increase since 2021. - Higher business interruption expenses, data breach costs and privacy litigation drove the increase. - Middle-market businesses saw average severity rise to $759,000 from $619,000, a 22.6% increase. - Smaller and mid-sized enterprises reported a 34% decline in average losses, to about $142,000 from roughly $215,000. - Large-business claims frequency fell to about 10 claims per 100 policies in 2025 from 15 in 2024. - Middle-market frequency declined to a little more than five claims per 100 policies from around six. - Coalition’s 2026 Cyber Claims Report showed overall claims frequency rose 3% in 2025 while average severity fell 19% to about $116,000. - Coalition’s portfolio covers more than 100,000 policyholders across the US, Canada, the UK, Australia and Germany. - Coalition’s data is not directly comparable with Chubb’s large-enterprise figures because it includes much smaller businesses. - Ransomware was the costliest 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. - Average ransomware claim severity reached $269,000, more than twice the broader portfolio average of $116,000. - Business interruption, system restoration and forensic investigation costs continue to drive losses even when ransom is not paid.

Between the lines: - The market is no longer in pure expansion mode. Premium growth is still positive, but insurers are facing tougher tradeoffs between growth and underwriting quality. - Claim trends are diverging by customer size. Large enterprises are driving severity higher, while smaller accounts are seeing lighter average losses. - That split will matter for pricing, capital planning and product design as carriers try to avoid concentrated losses from shared technology dependencies. - The rise in refusal to pay ransomware demands suggests stronger resilience, but it does not eliminate the cost of recovering from attacks.

What's next: - Beinsure expects cyber insurance growth to become more selective and more dependent on international market penetration. - Profitability is likely to depend more on underwriting discipline, claims severity control and exposure management across interconnected systems. - Europe, Latin America and developed Asian markets are expected to take a larger share of global premiums. - Insurers will keep watching ransomware, AI-enabled attacks and systemic cyber events for signs of broader loss accumulation.

The bottom line: - Cyber insurance is still expanding, but the easy growth phase is over. The next test is whether insurers can keep up with rising large-loss severity and emerging AI-driven risk.