The Cyber Insurance Market in 2026: After Two Years of Decline, Premiums Expected to Rise by 15% to 20%
Cyber insurance premiums have fallen by 22% from the peak in 2022 and fell an additional 6% in 2025. In 2024, global policies recorded a decrease in total premium for the first time. For 2026, insurers are forecasting a turnaround with a rise of 15% to 20%, driven by the acceleration of attacks on critical infrastructure and the increasing sophistication of AI-enabled fraud.
The cyber insurance market has experienced two years of counter-intuitive trends. While the sophistication and volume of attacks have increased, premiums have been on the decline. Cyber insurance premiums are currently 22% below the peak of 2022 and fell an additional 6% in 2025, with most policyholders reporting renewals of 2% to 3% lower in the third quarter. In 2024, the global direct gross premium for cyber insurance dropped from approximately $7.25 billion in 2023 to $7.08 billion, marking the first decline in the history of the category.
The explanation for this apparent anomaly lies in the market structure: more capital entered the segment during the premium boom from 2020 to 2022, increasing competition among insurers and driving prices down even as claims were on the rise.
The Reversal of 2026
Early indicators for 2026 signal the end of the soft market phase. WTW projects an acceleration in the pace of premium increases, estimating a rise of 15% to 20% throughout the year. Gallagher, the American brokerage, reported that the hardening cycle is beginning, driven by the escalating attacks on critical infrastructure and the increasing impact of AI-enabled fraud on claims.
What is Changing in Policies
Coverage is not shrinking in a widespread manner but is becoming more selective. Insurers are conditioning renewals on meeting minimum technical control requirements, including mandatory multi-factor authentication across all critical systems, advanced email security solutions, and documented awareness training programmes. Organisations that cannot demonstrate these controls face specific exclusions or premium increases above the market average.
The critical infrastructure, energy, healthcare, and financial services sectors are facing the worst conditions: some insurers are withdrawing coverage for state-sponsored attacks, a exclusion that creates significant gaps for companies in these sectors.
The Trap of False Security
The most underestimated risk is not the absence of insurance, but the illusion of coverage. Organisations that secured policies in 2021 or 2022 without subsequent review may find, at the time of a claim, that changes in the risk profile invalidate coverage or that newly added exclusion clauses by the market apply to their specific incident.
For the CFO and the CISO together, 2026 demands a review of existing policies focusing on three points: what is explicitly excluded, which controls the organisation needs to demonstrate to maintain valid coverage, and whether the contracted limits reflect the true cost of an incident given the current size of operations.