Cyber Insurance Premiums Drop Unexpectedly in 2025

In a surprising turn of events, the cost of cyber insurance decreased in 2025, despite a simultaneous rise in the frequency and severity of cyberattacks. This unexpected trend signals a significant shift within the cyber insurance market.

The Unexpected Drop in Premiums

Insurance broker Lockton reported an 11% drop in cyber insurance premiums across its portfolio in 2025. The most substantial reductions occurred in the first half of the year, with more moderate decreases following. Lockton anticipates this downward trend to continue, at least through the first half of the next reporting period.

Did You Know? Globally, cyber insurance premiums reached nearly $15 billion in 2024, a 7% increase from the previous year.

What’s Driving the Decrease?

The primary driver behind this decline is increased competition among insurance carriers. This competition is creating a more favorable environment for buyers, leading to lower premiums even as cyber threats continue to escalate.

Expert Insight: The decrease in premiums despite rising cyberattacks highlights the complex dynamics at play in the insurance market. Increased competition is currently outweighing the increased risk, but this balance could shift if a major cyber event occurs.

Looking Ahead

While premiums are currently decreasing, the market remains volatile. A significant cyber incident could reverse this trend and lead to increased costs. It is also possible that the increased competition among carriers will continue to drive down premiums in the short term. Munich Re projects the global cyber insurance market to reach $16.3 billion by the end of 2025, and anticipates premiums will double by 2030.

Frequently Asked Questions

What caused cyber insurance premiums to drop in 2025?

Increased competition among insurance carriers is the primary reason for the drop in premiums.

Did the number of cyberattacks increase in 2025?

Yes, the frequency and severity of cyberattacks increased in 2025, even as premiums decreased.

What is Lockton’s expectation for future premium trends?

Lockton expects cyber insurance premiums to continue to decline, at least through the first half of the next reporting period.

How will increased competition among cyber insurance carriers affect businesses’ ability to protect themselves against evolving cyber threats?