Technology

The Convergence of Cybersecurity and Cyber Insurance

By: Andrew Kligerman, Shaul Eyal, Daniel Bergman, Alfred Miller, Hugh Cunningham, Michael Junghans

Dec. 04, 2025 - 2 minutes 30 seconds

Person working on a laptop in a modern office with multiple monitors displaying code.

Overview:

Cyber insurance remains a key area of debate in property and casualty (P&C) insurance but continues to gain prominence in the industry.
We expect the product's recent strong growth to continue, with cyber insurance premiums set to potentially double over the next five years to US$30 billion-plus.
Cybersecurity measures and other risk controls have been effective, driving less than 50% loss ratios in 2024.

The TD Cowen Insight

Cyber insurance is a dynamic and growing area within property and casualty (P&C) insurance; a field about which there is little consensus. Speaking with the leading cyber insurance experts and skeptics, we expect insurers to increasingly lean into cyber as technology and models evolve to meet new challenges. We also think insurers' demands will increasingly shape cybersecurity.

Our Thesis

Cyber remains controversial. Some see P&C becoming "PC&C": property, casualty and cyber insurance. Others see its potential for systemic risk and question the models used to estimate catastrophic losses. We have reservations, but after our extensive channel checks, we expect more cyber growth, possibly reaching the US$32 billion in premiums by 2030 that one leading global insurer predicts.

Market formation trends point to cyber's staying power including segmentation by insurers, sophisticated exclusions and limits, diversification of capital and improved diversification.

We also like the implementation of cybersecurity measures pushed by insurers, increasingly linking insurance and cybersecurity. Loss ratios were below 50% in 2024 acting as evidence of the effectiveness of these controls (e.g., identity-first protection, automated response and zerotrust frameworks) and of coverages and exclusions.

What Is Proprietary?

The full report brings forward our experience covering insurance and cybersecurity in addition to insights from an extensive network of experts.

Financial and Industry Model Implications

Cyber insurance is increasingly a must-have offering for insurers. While rates are still down on the margin, we think the market will likely reach US$30 billion over the next 5 years versus US$16 billion at the end of 2025. That market is small in the context of a US$1 trillion P&C industry yet more than the US$13 billion in medical professional liability premiums written in 2024. It's also not too far behind the US$57 billion in workers' comp. That means the line could be a significant profit contributor if current loss ratios hold.

What to Watch

Advances in artificial intelligence (AI) and quantum computing could be game changers for cyber insurance, potentially giving a boost to hackers before being widely adopted to stop attacks. We also await standardization of coverage and development of a more robust reinsurance market to facilitate growth.

Subscribing clients can read the full report, The Convergence Of Cybersecurity And Cyber Insurance - Ahead Of The Curve, on the TD One Portal

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Andrew Kligerman

Managing Director, Insurance, TD Cowen

Andrew Kligerman
Managing Director, Insurance, TD Cowen

Biography

Andrew Kligerman is a managing director covering insurance, a sector he has covered for more than 30 years. He joined TD Cowen in 2023.

Shaul Eyal

Managing Director, Communications, Security, and Infrastructure Software Research Analyst, TD Cowen

Shaul Eyal
Managing Director, Communications, Security, and Infrastructure Software Research Analyst, TD Cowen

Biography

Shaul Eyal is Managing Director and Senior Analyst covering the Communications, Security, and Infrastructure Software sectors and is one of Wall Street’s leading experts in those spaces. He started his equity research career at Oppenheimer & Co. covering Israeli technology related equities and expanded his research focus to cover the security and communication software universes.

Shaul holds an M.B.A. from Fordham University and an LL.B with honors from Oxford Brookes University. He served for five years in the Special Forces of the Israeli Defense Forces, where he held the rank of Lieutenant.