Cyber insurance, once a niche segment of the insurance industry, has become a critical component of risk management for businesses across Britain. As cyber-attacks grow in scale and sophistication, insurers are scrambling to keep pace—raising premiums, tightening underwriting standards, and in some cases, questioning the very insurability of digital threats.
The UK Government’s Cyber Security Breaches Survey 2024 underscores the persistent threat landscape. Half of all businesses (50%) and nearly a third of charities (32%) experienced cyber breaches or attacks in the past year. The figures are starker for larger organizations—70% of medium and 74% of large firms reported incidents. Despite this, only 43% of businesses have cyber insurance, with coverage rising to 62% among mid-sized companies and 54% for large enterprises. Worryingly, many respondents remain uncertain about whether their policies include cyber protection, suggesting a gap in understanding.
A Market Under Pressure
This rising tide of attacks has forced insurers to adjust. Beazley, a major underwriter of cyber risks, saw its first-half pre-tax profit nearly double to $728.9 million, driven by strong premium growth and lower-than-expected claims. But the broader industry remains cautious. Insurers are imposing stricter security requirements and raising prices to counter mounting ransomware claims.
These measures have not always been met with enthusiasm. A Coalition Inc. study of UK mid-market firms found that only 19% reported positive experiences with cyber insurance. Nearly a third found the information requirements burdensome, while a quarter felt insurers lacked genuine cyber security expertise. Many businesses are also struggling to allocate adequate budgets—43.4% felt their resources were insufficient to guard against cyber threats effectively.
Public-Private Collaboration on the Horizon?
As cyber risks escalate, insurers are increasingly questioning their ability to shoulder the burden alone. Industry leaders, including Zurich and Marsh McLennan, argue that certain systemic threats—such as large-scale attacks on critical infrastructure—may be “uninsurable” without government support. They propose a public-private partnership model akin to existing state-backed terrorism insurance schemes, where governments share the financial impact of catastrophic cyber events.
The global picture reinforces this unease. The Munich Re Global Cyber Risk and Insurance Survey 2024 found that 87% of executives worldwide doubt their organization’s ability to withstand a major cyber incident, up from 83% in previous years. This suggests a growing realization that cyber risk management requires more than just a financial safety net—it demands strategic collaboration between businesses, insurers, and governments.
Cyber Insurance as a Strategic Asset
Despite the challenges, cyber insurance remains an essential tool for risk mitigation. Yet, many businesses still regard it as an afterthought rather than a core pillar of their cybersecurity strategy. Tom Draper, UK head of insurance at Coalition, notes that IT departments often approach cyber policies with scepticism, failing to see their value beyond compliance requirements. Greater engagement between insurers and security teams, he argues, could improve trust and demonstrate the tangible benefits of cyber cover.
As threats multiply, cyber insurance is evolving from a backstop to a frontline defence. The question is whether the market can adapt fast enough—or whether the state will ultimately have to step in.
Upcoming Webinar: Navigating the Future of Cyber Insurance
For those seeking deeper insights into the evolving landscape of cyber insurance, an upcoming IT Europa webinar on "Navigating the Future of Cyber Insurance" will be held on Wednesday 19th of March . This session aims to provide MSPs with practical strategies to enhance their portfolios of cyber resilience and effectively integrate insurance into their risk management services. To register and obtain more details, please visit the following link:
https://us06web.zoom.us/webinar/register/1817397923074/WN_LDIOP9EMTS2Lfm...
