2025 Cyber Insurance Market Outlook 

Cyber insurance rates softened in 2024 as competition from existing carriers increased, new players entered the market, and insureds strengthened cyber hygiene measures to reduce exposures. Risk management company Marsh reported that cyber insurance rates fell by 1% in the third quarter of 2024, and coverage continued to broaden. Yet the risk of cyberattacks remains high; 44% of Canadian organizations experienced a cyberattack in 2024, according to data from the Canadian Internet Registration Authority. Given the potential impact of these events, insurers could increase premiums or implement stricter underwriting guidelines in 2025, especially for organizations that witnessed cyber losses in 2024. Policyholders who adopt a strong cybersecurity posture and stay abreast of evolving cyberthreats may be best prepared to navigate this year’s cyber insurance market.

Developments and Trends to Watch

• Ransomware—Ransomware attacks doubled between July 2023 and June 2024, according to a Microsoft report. Costly losses due to payment demands, data recovery efforts, business interruptions and regulatory consequences can stem from such attacks. Although defending against ransomware attacks will be a top priority for all organizations this year, larger companies should be especially vigilant; threat actors often target these establishments, anticipating that the urgency to resume operations will pressure them into paying the ransom. Particularly vulnerable industries include manufacturing, construction, health care and pharmaceuticals.
• Supply chain vulnerabilities—Supply chain attacks are a pressing concern for insureds. Vendors and suppliers often don’t have the same level of cybersecurity as a target organization, making them an easier point of entry for malicious parties. According to management consulting company Gartner, 45% of organizations will have witnessed attacks on their software supply chain by 2025. Taking steps to address the risks posed by third parties formally will be critical for organizations this coming year.
• Artificial intelligence (AI)—Threat actors will leverage AI to create sophisticated scams in 2025. In particular, cybercriminals may use AI to craft convincing phishing emails or develop “deepfake” synthetic audio or video to impersonate employees for nefarious gains. However, organizations will increasingly use AI to analyze files and scan for vulnerabilities, helping them identify threats and minimize losses. Therefore, AI could be a help and a hindrance in the next year.
• Cyberwarfare—Nation-state cyberattacks remain a top concern in the cyber insurance space in 2025, particularly as geopolitical challenges contribute to global cyberwarfare worries. The Canadian Centre for Cyber Security reported that the most prevalent nation-state adversaries currently facing Canada include the People’s Republic of China, Russia and Iran, with attackers from these countries looking to undermine critical infrastructure and endanger national security. Furthermore, geopolitical tensions can lead to further opportunist attacks from cybercriminals looking to exploit conflicts for personal gains. Insurance carriers could add war exclusion clauses to policies; insureds should check policy terms and conditions carefully to ensure robust coverage.

 Tips for Insurance Buyers

• Adopt a zero-trust approach and subject network requests to strict access controls. Establish a cyber incident response plan to build cyber resilience and minimize damages in the event of breaches.
• Implement robust employee training to help staff proactively spot cybersecurity concerns. Include pertinent 2025 cyberthreats— especially AI-powered attacks, ransomware and cyberwarfare—in teachings.
• Consult insurance and legal professionals to determine regulatory exposures. Make compliance adjustments as needed.
• Work with insurance professionals to understand the different types of cyber coverage available and secure a personalized policy. Carefully examine policy terms and conditions and any exclusions.
• Carefully vet third-party vendors before entering a partnership. Review their cybersecurity practices and ensure their data protection practices are sufficiently robust to safeguard sensitive information.

This Market Outlook is not intended to be exhaustive, nor should any discussion or opinions be construed as professional advice. © 2025 Zywave, Inc. All rights reserved. 

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