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AM Best keeps stable outlook for global cyber insurance segment
AM Best cites steady demand and improving underwriting tools, while warning ransomware and AI-enabled attacks could lift large-claim risk.
AM Best has reaffirmed a stable outlook for the global cyber insurance market, citing continued customer demand for coverage even as pricing conditions soften. The rating agency links its view to ongoing profitability over the intermediate term and to the expanding role of artificial intelligence across underwriting, exposure modeling, and claims handling.
AM Best expects cyber insurance take-up to remain resilient despite increased competition pressuring rates. It points to factors such as digitisation, tightening regulatory obligations, and a broader business recognition of cyber risk, along with continued investment in prevention, resilience, and incident response.
The agency also expects underwriting margins to stay favourable over the medium term, though it anticipates some narrowing as more insurers compete for business. It says capacity is growing not only from traditional reinsurers, but also from alternative capital providers, while tighter regulation should continue nudging more organizations to buy coverage.
On the risk side, AM Best highlights persistent and increasingly sophisticated cyber threats, including ransomware, business email compromise, and funds transfer fraud that can drive large claims. It also warns that greater digital interconnection can raise the risk of systemic events, and notes that AI tools that strengthen defenses can be used by attackers, while insurers face exposure through the sensitive policyholder data they hold.