Despite a fast-evolving cyber threat landscape, Swiss Re reports that cyber insurance rates have deteriorated for a third consecutive year, leading to growth estimates being revised down from 6% to 5% compound annual growth rate (CAGR) from 2023 onward.
Fabian Willi, Head Cyber Key Accounts at Swiss Re, said, “Despite increasing cyber risk, rate deterioration for the third straight year is neutralising the organic exposure growth the market has worked hard to build. To stay sustainable, the market needs pricing stability, and to expand or enter into new customer segments.”
Swiss Re attributes the rate deterioration to heightened competition, with cyber insurance supply continuing to outpace demand. This competitive environment has driven further concessions on premiums, limits, coverage, and cyber security controls.
However, cyber remains a compelling business line, with Swiss Re projecting full-year premiums to reach $15.6 billion in 2025 and $16.4 billion in 2026.
Of the 2025 total, North America continues to dominate, accounting for 66% of premium share (~$10.28 billion), followed by Europe with 21%. APAC ranks third with 10%, while LatAm and MEA remain relatively small at 2% each.
The cyber threat landscape and loss trend environment continue to evolve rapidly. Concerns around systemic loss events and rising privacy liability litigation demand caution when it comes to year-on-year premium reductions. The market needs to stabilise at a sustainable rate level to absorb extreme events and safeguard the long-term viability of this critical coverage.
At the same time, expansion into new or underserved customer segments could help offset the slowdown in organic growth. Chief among these is the small-to-medium enterprise (SME) segment, which Dani Tobler, Head Cyber Reinsurance at Swiss Re, describes as “cyber’s biggest open runway.”
SMEs account for 90% of firms worldwide yet contribute only around 30% of cyber premiums ($4.7 billion), representing a significant SME cyber protection gap.
“SMEs do not need scaled-down corporate policies, they need tailored, accessible products and smarter distribution models,” said Tobler. “That is what will help close the protection gap – a step that will not only drive growth but also strengthen resilience across the global economy.”
Swiss Re highlighted five fundamental growth drivers with the potential to help bridge the SME cyber protection gap: education, product design, pricing, risk assessment & underwriting, and distribution.
As the SME protection gap closes, Swiss Re expects the role of reinsurance in supporting the cyber market to become increasingly important. Greater SME penetration increases accumulation risk, with reinsurance critical to enabling capacity management and data-driven growth.
“Cyber still outpaces many other lines but success now depends on realistic growth expectations and building a healthy, sustainable market,” Tobler added. “The next chapter will be written by those who expand access, especially to SMEs, while keeping resilience front and centre. As the SME protection gap narrows, reinsurance will be pivotal to managing that exposure and providing the data-driven insights carriers need to target the right opportunities, region by region.”
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