Cyber Insurance Growth Masks Short-Term Vulnerabilities From AI Tools
U.S. cyber insurers posted 11% growth in direct written premiums in 2025, reversing a two-year decline. But Fitch Ratings warns that artificial intelligence developments are creating underwriting risks that could outpace the industry's ability to manage them in the near term.
The concern centers on AI tools like Anthropic's Mythos model, which Fitch said has raised flags among financial and cybersecurity professionals. These systems accelerate vulnerability discovery and threat analysis at scale-work that was once labor-intensive and offered little financial incentive for researchers to pursue.
That efficiency cuts both ways. "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 Feb. 15 brief on the cyber marketplace. "This lowers barriers for attackers, expands third-party risks, and could materially increase attack volume."
The 2025 premium growth came largely from volume rather than pricing power. Policies in force jumped 35% while aggregate pricing softened, indicating a competitive underwriting environment. Larger companies continue to hold cyber coverage at higher rates than smaller firms.
Demand has strengthened across the board as boards recognize that cyber events disrupt operations, trigger legal liabilities, and impair revenue even when direct financial losses remain limited. Fitch expects insurers to tighten contract language around war exclusions, silent cyber, business interruption, and contingent losses as they integrate more rigorous cybersecurity assessments into underwriting decisions.
The credit-rating agency plans to publish a more detailed analysis of the cyber market this summer.
For insurance professionals, understanding AI for Insurance and the AI Learning Path for Cybersecurity Analysts can help navigate these emerging risks in underwriting and risk assessment.
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