Cyber Insurance Premiums Rise 11%, but AI Tools Create New Vulnerabilities
U.S. cyber insurers posted 11% growth in direct written premiums in 2025, reversing a two-year decline. But Fitch Ratings warned that artificial intelligence tools designed to detect threats could create more problems than they solve in the near term.
Fitch flagged Anthropic's Mythos model as a particular concern. The tool accelerates vulnerability discovery and incident response at scale, but attackers will likely exploit those same capabilities faster than patches can be deployed.
"AI is particularly disruptive to cyber risk because traditional vulnerability analysis was labor-intensive and offered limited financial upside for researchers, a gap AI now fills at scale and speed," Fitch said in a February report. "This lowers barriers for attackers, expands third-party risks, and could materially increase attack volume."
Volume Growth Masks Pricing Pressure
The 11% premium growth came almost entirely from volume. Policies-in-force jumped 35% while aggregate pricing remained soft, indicating a competitive underwriting environment.
Larger companies continue to lead adoption of cyber insurance, while smaller firms lag. Demand has strengthened overall as boards recognize that cyber events disrupt operations, trigger legal liability, and impair revenue even when direct losses are minimal.
Underwriters Tightening Contract Language
Insurers are reassessing contract terms and integrating cybersecurity assessments into underwriting decisions. Policy language around war exclusions, silent cyber, business interruption, and contingent losses will be critical going forward.
Fitch plans to publish a more detailed analysis of the cyber market this summer.
For insurance professionals navigating these shifts, understanding how AI affects insurance and reviewing AI's role in cybersecurity can help inform underwriting strategy and risk assessment.
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