Cyber reinsurance market reaches new high as Artificial Intelligence risks reshape coverage

Cyber insurance has grown into a ? billion global market as businesses elevate cyber resilience and seek protection for new Artificial Intelligence exposures. Demand is rising for dedicated Artificial Intelligence cover even as insurers introduce tighter exclusions and stricter underwriting expectations.

Global businesses are treating cyber resilience as a strategic priority, with reinsurance and insurance playing a central role in managing digital threats that continue to intensify. Munich Re put the global cyber insurance market at ? billion and said there was ample room for profitable growth. Its findings drew on more than 9,500 respondents in 20 countries. Citing Statista, the report warned that cybercrime would cost the world ? trillion by 2028, more than the combined GDP of Germany, Japan and India.

Artificial Intelligence has overtaken cloud computing as the technology executives see as most important to their business. Some 71% of C-level respondents flagged Artificial Intelligence as significantly relevant this year, up from 62% in 2024. Cloud use remains near-universal at 98%, but Artificial Intelligence adoption has jumped to 57%. Two in three executives expect Artificial Intelligence to deliver gains; 23% fear the opposite. Almost two-thirds, 63%, want to buy insurance against Artificial Intelligence-related risks. The Munich Re and ERGO Tech Trend Radar 2026 named Artificial Intelligence, cyber resilience, climate analytics and emerging liability as defining themes for reinsurers. Machine-learning underwriting tools, Munich Re said, have lifted straight-through processing by 30% to 35% in some life and health portfolios.

Executives identified data privacy (52%), inaccurate outputs (42%), cyberattacks (42%) and skills shortages (36%) as their biggest Artificial Intelligence concerns. Insurers are moving to address that demand with new products. Munich Re’s aiSure offers performance warranties. Armilla, backed by Chaucer and Axis Capital, sells Lloyd’s-underwritten cover for hallucinations, model drift and regulatory breaches up to ? million. Testudo, launched in January, targets generative Artificial Intelligence litigation, including copyright disputes.

At the same time, exclusions are tightening. Verisk’s ISO rolled out three generative Artificial Intelligence exclusion endorsements on January 1. With ISO forms behind roughly 82% of US property and casualty policies, take-up is likely to be swift. Gartner expects insurers to demand robust Artificial Intelligence controls as a condition of cover by 2030.

Concern about cyber risk remains elevated across markets. On average, 60% of executives said they were worried about a cyberattack. Anxiety ran highest in India and South Africa at 80%, followed by France at 71% and Japan at 70%. The Netherlands (43%), the United Arab Emirates (47%) and mainland China (48%) were the least concerned. Some 89% of executives said their defenses were inadequate, up from 87% in 2024. The Geneva Association has long put the cyber protection gap at about 90%, meaning barely a tenth of cyber risk is insured.

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