Cyber insurance demand rises as global tensions fuel surge in digital threats

Cyber insurance has become the fastest-growing area of demand in the insurance sector, as conflicts and geopolitical tensions increasingly spill into cyberspace. Organizations are reportedly investing ever more heavily in protection against cyberattacks, while insurers are adapting coverage and response capabilities to address complex, politically driven digital risks, according to new findings from GlobalData.

A GlobalData poll conducted across its Verdict Media network, found that 27.4 percent of industry professionals expect cyber insurance to see the sharpest increase in demand. This placed it ahead of political risk insurance at 25 percent, supply chain insurance at 23.8 percent, and business interruption insurance at 13.1 percent. The data suggests that concerns about digital security now outweigh those linked to traditional operational and political exposures.

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Charlie Hutcherson, insurance analyst at GlobalData, said the growing overlap between geopolitical conflict and cyber warfare is a key factor behind this trend. “The ongoing conflict between Russia and Ukraine has expanded from conventional battlegrounds into coordinated cyber operations aimed at critical infrastructure and corporate networks. Meanwhile, the growing unrest in the Middle East has contributed to a rise in state-sponsored and hybrid cyberattacks that stretch well beyond localized warzones. Organizations are recognizing that cyber incidents increasingly stem from geopolitical escalation and nation-state actors rather than isolated criminal groups.”

These kinds of threats can disrupt supply chains, weaken operational resilience, and damage corporate reputations. GlobalData said the findings reveal gaps in traditional insurance policies, as many businesses face exposures that extend far beyond what conventional coverage can address.

Cyber insurance is now viewed as a core component of organizational resilience and risk management strategies.

Hutcherson explained that insurers are under pressure to design products that go beyond financial compensation. “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," he said.

"With budgets tightening across many sectors, buyers will seek policies that deliver tangible value before and after an incident occurs. Insurers that collaborate closely with governments and cybersecurity specialists, while strengthening preventative measures such as vulnerability assessments and employee training will be best placed to retain and grow cyber customers. As geopolitical risks continue to move online, cyber insurance will remain a critical tool for protecting organizations from the full scale of emerging threats.”

What do you think about the growing demand for cyber insurance amid rising global tensions? Let us know in the comments.

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