Cyber Insurance Premiums Projected to Surge to $27 Billion by 2030 Amid Rising Digital Threats
By Josh Recamara, August 18, 2025
The global cyber insurance market is poised for significant growth, with premiums expected to climb from $15.1 billion in 2024 to $27 billion by 2030, according to the QualRisk Cyber Insurance Center’s (QCC) 2025 Global Market Report. This projected increase, representing a robust compound annual growth rate (CAGR), underscores a seismic shift in the insurance landscape as businesses worldwide grapple with escalating cyber threats, stricter regulatory mandates, and the rapid expansion of digital infrastructure. However, estimates vary, with some analysts forecasting premiums could reach as high as $50 billion by the decade’s end, driven by innovation and market penetration in underserved regions.
A Market Driven by Necessity
The surge in cyber insurance premiums is fueled by the increasing frequency and sophistication of cyberattacks. High-profile data breaches, ransomware attacks, and cyber extortion incidents have made cybersecurity a boardroom priority. The QCC report highlights that the global cyber insurance market is responding to these risks, with Europe emerging as a key growth engine, recording a 22% CAGR over the past three years. In contrast, the United States, which accounts for 70% of global premiums, experienced a 2% year-over-year decline in 2024, signaling a maturing market with slower growth. Meanwhile, regions like Asia Pacific are expected to play a larger role, driven by rapid digital transformation in countries such as China, India, and Singapore.
The rise in cyberattacks is staggering. A 202% increase in phishing email attacks in the second half of 2024, with 82.6% leveraging AI technology, has heightened the urgency for robust insurance solutions. Credential phishing attacks surged by 703% in the same period, while ransomware incidents rose by 126%, with North America bearing 62% of global targets. These statistics, reported by Risk Placement Services, underscore the evolving threat landscape that is pushing businesses to seek financial protection through cyber insurance.
Regulatory Pressures and Market Dynamics
Stringent data protection regulations, such as the General Data Protection Regulation (GDPR) in Europe, the Health Insurance Portability and Accountability Act (HIPAA), and the California Consumer Privacy Act (CCPA), are driving demand for cyber insurance as a compliance necessity. These regulations impose hefty fines for data breaches, making insurance a critical tool for mitigating financial risks. The QCC report notes that data breach insurance, covering legal fees, forensic investigations, and reputational management, is experiencing significant uptake, particularly as it addresses ransomware and extortion scenarios.
Market dynamics are also shifting. The QCC Global Cyber Insurance Price Index dropped to 269 in 2024 from a peak of 340 in 2022, indicating a cooling of the ransomware-driven hard market of 2020–2022. This stabilization suggests that future growth will rely less on rate increases and more on deeper market penetration, product innovation, and global reinsurance structures. However, challenges persist, including inadequate actuarial data, high loss ratios due to weak client cybersecurity practices, and systemic risks from large-scale or state-sponsored cyberattacks. These factors complicate pricing and deter some insurers from fully engaging in the market.
Regional and Segmental Growth Opportunities
Europe’s rapid growth is attributed to heightened risk awareness and regulatory pressures, while Asia Pacific is emerging as the fastest-growing region. Digital transformation across industries like banking, financial services, and insurance (BFSI), healthcare, and IT, coupled with rising ransomware attacks, is driving demand in countries like Japan, South Korea, and Australia. Despite low penetration among small and medium-sized enterprises (SMEs) and a lack of historical loss data, the region offers significant opportunities for sector-specific products and AI-enhanced underwriting.
In the U.S., the market remains dominated by major carriers like Chubb, which leads the primary market, and Hartford Steam Boiler, which holds a 26% share in the endorsements segment with $75 million in premiums. The surplus lines segment, led by Starr, sees the top five carriers controlling 26% of the market. The personal cyber insurance segment is also expanding rapidly, driven by demand for household-level protection against identity theft, fraud, and cyber extortion. QCC’s modeling of the non-U.S. personal market highlights its potential to underpin further growth.
Globally, SMEs represent an untapped opportunity. The World Economic Forum notes that only one in four SMEs is currently protected by cyber insurance, despite their reliance on technology and vulnerability to attacks. Howden’s 2024 Cyber Insurance Report emphasizes the need for simplified buying processes and increased risk awareness to boost uptake among SMEs. Initiatives like Howden’s platform, which allows businesses with revenues under $250 million to secure up to $6 million in coverage with minimal data inputs, are revolutionizing access for smaller firms.
Challenges and Strategic Implications
Despite the optimistic outlook, the cyber insurance market faces significant hurdles. The lack of historical data complicates actuarial modeling, leading to pricing difficulties and high premiums. Systemic risks, such as large-scale cyberattacks targeting critical infrastructure, threaten insurers’ financial viability. Reinsurers, pivotal to supporting market growth, remain cautious, focusing on improved modeling and tighter contract language. Regulators in Europe and the U.S. are also pressing for robust assessments of extreme cyber events, forcing insurers to refine their stress-testing scenarios.
Coverage gaps persist, particularly around AI liability. While policies generally cover AI-driven attacks, they often fail to address liabilities from biased AI models or data hallucinations, leaving organizations exposed. Risk Placement Services reports that carriers are responding by offering preventative resources, such as training, risk assessments, and Endpoint Detection and Response services, to mitigate these risks. However, the industry must innovate to address emerging threats and maintain profitability.
Competitive Landscape and Innovation
The competitive landscape is dynamic, with leading players like Chubb, AIG, and Hartford Steam Boiler dominating the U.S. market, while global players like Munich Re and Zurich Insurance contribute to international growth. Howden’s report projects that premiums could reach $40–50 billion by 2030, driven by innovation in distribution, tailored products, and geographic expansion. Partnerships with cybersecurity vendors and AI-driven risk analytics are enhancing underwriting precision, making policies more attractive to businesses.
The manufacturing sector, which contributed 3.2% to global industrial growth in 2017, is a key driver of cyber insurance demand due to increased automation and AI adoption. Supply chain vulnerabilities and intellectual property theft are major concerns, prompting manufacturers to seek coverage. Similarly, the BFSI sector, targeted in 35% of cyberattacks in 2017, relies heavily on cyber insurance to secure sensitive data.
Looking Ahead
The projected growth to $27 billion by 2030 signals a maturing cyber insurance market, but achieving this potential requires overcoming significant challenges. Insurers must balance capacity allocation with systemic risk exposures, refine capital modeling, and address regulatory demands. The shift toward international markets, particularly in Europe and Asia Pacific, and the untapped potential of SMEs offer substantial opportunities for growth. As digital transformation accelerates and cyber threats evolve, the industry’s ability to innovate and adapt will determine its trajectory.
For businesses, cyber insurance is no longer optional but a strategic necessity. As the QCC report concludes, “Future growth will depend on carriers’ ability to broaden uptake across regions, adapt coverage to evolving exposures, and address reinsurance and capital challenges while maintaining profitability.” With the right strategies, the cyber insurance market is well-positioned to meet the growing demands of a digital world.
Sources:
- QualRisk Cyber Insurance Center 2025 Global Market Report
- Risk Placement Services, 2025
- Howden’s 2024 Cyber Insurance Report
- Research and Markets, Cybersecurity Insurance Market Forecast 2025–2030