A volatile cyber threat environment fueled by trends such as the adoption of cloud computing, increasingly interconnected IT environments, geopolitical conflicts, evolving cyber threats, and emerging regulatory requirements is driving the demand for cyber insurance, according to recent reports.
In a survey released this week, data analytics firm
GlobalData found that 27% of 84 industry insiders surveyed believed cyber insurance would see the highest increase in demand among other insurance fields, topping a list that included political risk insurance (25%), supply chain (23.8%), and business interruption (13.1%).
“The findings suggest digital security concerns are now outpacing more traditional political and operational exposures,” GlobalData wrote.
Meanwhile, analysts with
ResearchandMarkets said they expect the global cyber insurance market to grow from $20.56 billion this year $44.67 billion by 2032, growing at an average of 11.65% a year during that timeframe.
“Heightened digital exposure and stringent compliance mandates are driving cyber insurance adoption as a core element of enterprise risk management,” the report’s authors stated.
Fast-Evolving Cyber Threats
These reports and
others like them paint a picture of a cyber threat landscape that is evolving rapidly and escalating in numbers and sophistication, in part due to AI's fast adoption by threat groups. These trends raise the stakes for organizations, both enterprises and SMBs, that risk high costs, reputational damage, and – particularly among smaller companies – being driven out of business by a ransomware or other attack.
In its annual Cost of a Data Breach Report,
IBM in July reported that the
average cost is $4.4 million.
Kinetic Conflicts Fuel Cyberattacks
Geopolitical risks – such as Russia’s ongoing invasion of Ukraine and the ongoing unrest in the Middle East – are also contributing to the demand for cyber insurance, according to
Charlie Hutcherson, insurance analyst at GlobalData. The Russia-Ukraine conflict is spilling over from the battlegrounds in Eastern Europe into coordinated cyber operations targeting critical infrastructure and corporate networks, Hutcherson said.
At the same time, the instability in the Middle East has given rise to more state-sponsored and hybrid attacks beyond the region.
“Organizations are recognizing that cyber incidents increasingly stem from geopolitical escalation and nation-state actors rather than isolated criminal groups,” he said in a statement. “Digital threats are evolving alongside political instability. Insurers are facing growing demand for cyber products that are clearer in coverage and more active in supporting resilience, from real-time threat monitoring to faster post-breach recovery.”
As corporate spending tightens, insurance buyers are looking for policies that deliver tangible value before and after an incident occurs, Hutcherson said, adding that “as geopolitical risks continue to move online, cyber insurance will remain a critical tool for protecting organizations from the full scale of emerging threats.”
Drivers and Strategic Shifts
The ResearchAndMarkets report noted that the U.S. tariff program under President Trump has affected tech costs in the insurance arena, “contributing to higher procurement expenses, with downstream effects on premium calculations and insurer cost structures. Supply chain adjustments are ongoing, as solution providers adapt sourcing strategies to maintain organizational resilience and ensure stable service delivery.”
Dan Candee, CEO of cyber warranty firm
Cork Protection, told MSSP Alert that the drivers and strategic shifts – and particularly the shift toward integrated “prevention-and-response” bundles – are also what his company is seeing. That said, Candee suggested the growth numbers may be conservative, given that other analyses see an annual growth trend of 20% to 25%.
He also said the report’s discussion of contingent business interruption from supply chain failure was interesting.
“While SMBs don't see it as a tariff-related event – yet – we do see it because threat actors in 2025 have gotten significantly smarter at infiltrating our customers' vendors,” the CEO said. “An example would be in construction services, where the target is the construction company for ACH fraud, and they steal $20,000-$50,000 through their architecture or concrete vendor’s invoice request."
Not Too Small to Attack
He added that despite the noise around insurance, the reality for SMBs is that less than 20% of the market has the protection they need.
“We must continue to educate today’s business owners, non-profits, and public sector organizations that no organization is too small or immune to threat actors,” Candee said.
In a report released earlier this year, Cork addressed what it called the ongoing “complacency gap” that is making SMBs less protected than they need to be.
“Business owners and employees often operate under a false sense of security, believing their organization is too small to be a target or that basic measures like antivirus software are sufficient protection,” according to the report, “
SMB Cyber Defense 2026: Expert Strategies for Staying Ahead of Threat Actors.” “This mindset is a critical vulnerability that attackers are adept at exploiting. This complacency is directly at odds with the reality of automated, indiscriminate attacks that no longer distinguish between large enterprises and small businesses.”
Changing Landscape for MSSPs, MSPs
Those same trends – the shifting threat environment and the significant financial and operational impact of attacks on SMBs – are also changing the playing field for MSSPs and MSPs, with the “traditional model of IT support ... giving way to a new paradigm centered on proactive, specialized security,” the report’s authors wrote.
“The most significant trend in the managed services industry is the pivot from offering cybersecurity as an optional, add-on service to embedding it as the core, non-negotiable foundation of the entire service offering,” the Cork report said. “This is not merely a change in the product catalog; it is a fundamental shift in business identity, requiring deep investment in new skills, tools, and a security-centric culture.”
Cork’s Candee said the changes in the industry are affecting everyone, from SMBs and enterprises to MSSPs, MSPs, and insurance providers.
“One hundred percent of our MSP partners have to complete insurance questionnaires and assist with an increase in insurance-related questions,” he said. “By managing threat prevention, risk insights and – increasingly – financial implications of breaches, such as insurance and warranty payouts, everyone is forced to live in a very different world than two years ago."
