UK brokers have identified cyber insurance as the commercial insurance product with the most growth potential among new and emerging offerings.
This view is supported by findings from GlobalData’s 2025 UK Commercial Insurance Broker Survey, which shows that 53.6% of brokers expect cyber insurance to record the strongest growth in the category.
The survey indicates that cyber insurance is seen as having considerably more potential than other emerging products. Renewable energy insurance, the next most cited product, was selected by only 8.8% of brokers. The data suggests a significant opportunity for insurers, particularly as cyber insurance penetration remains low among small and medium-sized enterprises (SMEs).
According to GlobalData’s 2025 UK SME Insurance Survey, 60.8% of SMEs do not currently hold cyber insurance. The most common reason given is the perception that their business is unlikely to be targeted by a cyberattack, with 40.5% of SMEs citing this belief.
Beazley, a specialty insurer, has previously warned that SMEs must strengthen their cybersecurity frameworks as threats continue to evolve. The firm points to the rise of AI-driven attacks, remote work, and cloud reliance as factors expanding the risk landscape for smaller businesses.
Recent UK government data shows that 43% of businesses reported a cyber breach or attack in the past year, with the average cost of the most disruptive breach at £1,600, rising to £3,550 when excluding zero-cost cases.
S&P Global Ratings and other industry specialists have also reported that cyber insurance penetration rates among UK SMEs remain below 10%. The market faces ongoing challenges, including a skills gap in cyber expertise and the impact of AI advancements, which are enabling more sophisticated attacks.
Beatriz Benito (pictured above), lead insurance analyst at GlobalData, said: “Both insurers and reinsurers are diversifying their strategies to tap into emerging risks, which will support growth in the cyber insurance market. A greater appetite around this line of business will help soften market conditions, as an increase in capacity can help insurers combat soaring premiums.”
Benito also noted that despite growing awareness of cyber risks, adoption of cyber insurance is not widespread.
“Despite the growing awareness of cyber risks among businesses, the adoption of cyber insurance is far from universal, with underinsurance remaining a key challenge to the industry. The protection gap is more pronounced among smaller businesses despite SMEs being more vulnerable of an attack. Insurers will need to tackle the protection gap through several fronts to grow the cyber insurance market,” she said.
She added that focusing on the operational and reputational impact of cyberattacks may help increase uptake.
“Equally, there could be greater transparency on policy wording, making it clearer what the perils and exclusions are to avoid this being a barrier to buyers. Lastly, SMEs remain a largely untapped market and are often more vulnerable to attacks but have fewer resources to respond effectively. This makes them strong candidates for tailored cover, developing products that address their specific needs,” Benito concluded.
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