The U.S. cyber insurance market grew in 2025, with premiums reaching approximately $9.46 billion, according to a new report from the National Association of Insurance Commissioners (NAIC).
The NAIC’s 2026 Report on the Cybersecurity Insurance Market found that direct written premiums increased 3.5% from 2024, while the number of claims and the cost of major cyber incidents continued to rise.
Domestic insurers wrote approximately $7.46 billion in cyber insurance premiums during 2025, while non-U.S. surplus lines insurers contributed another $2 billion.
The report shows that domestic cyber insurance premiums have grown significantly since 2020, when they totaled $2.75 billion. This represents a compound annual growth rate of approximately 22%.
The number of cyber insurance policies in force also increased. Domestic insurers reported 5.84 million policies, up 33% from the previous year.
Despite continued market growth, insurers experienced higher claims activity and increasing losses.
According to the NAIC, insurers reported 56,323 cyber insurance claims in 2025, a 20% increase from 2024. The industry-wide loss ratio rose to 53 from 48.7, indicating that insurers paid more in claims relative to premiums even as cyber insurance prices continued to decline.
The report also found that large businesses are experiencing significantly higher cyber claim costs.
For companies generating at least $1 billion in annual revenue, average cyber claim severity reached approximately $4.4 million in 2025, double the amount reported in 2024.
The increase was largely attributed to higher business interruption expenses, data breach costs and privacy-related litigation.
The NAIC also identified artificial intelligence, ransomware, cloud service outages and third-party technology providers as major factors shaping cyber insurance risks.
As businesses become more dependent on shared technology systems, a single cyber incident can potentially affect multiple organizations and trigger claims across numerous insurance policies.
Despite increased awareness of cyber threats, significant coverage gaps remain. The NAIC estimated that only about 1% of global economic losses from cyber incidents are insured, leaving many businesses, particularly small and midsize companies, exposed to potentially substantial financial losses.
The report highlights the importance of evaluating cyber insurance coverage carefully, including policy limits, exclusions, ransomware protection, business interruption coverage and protection against social engineering and funds transfer fraud.
For independent insurance agencies, the findings underscore the need to help commercial clients understand their cyber exposures and review whether existing insurance policies provide adequate protection.
The NAIC noted that while the cyber insurance market continues to expand, rising claims costs and increasingly complex threats remain important challenges for insurers, businesses and regulators.
Information for this article was provided by NAIC. Views and claims expressed in this article are those of the source company and do not necessarily reflect the views of AgencyEquity.com. This article may have been edited with the help of AI.
