A recent industry study conducted by GlobalData highlights the profound difficulties confronting the insurance sector in its efforts to provide comprehensive cyber insurance coverage. According to a survey carried out across Verdict Media sites during the first quarter of 2026, approximately one in three insurers (32.1%) identified the accurate assessment of cyber risks as the most significant hurdle to market participation.
Analytical Constraints and Data Deficits
The fundamental challenge in underwriting cyber insurance lies in the lack of actuarial stability. Unlike traditional insurance lines—such as motor or property insurance—where historical data can be used to predict future probabilities, cyber threats are characterised by their volatility and lack of comprehensive historical records.
Beatriz Benito, the Lead Insurance Analyst at GlobalData, noted that underwriters cannot rely on traditional retrospective data to gauge future vulnerabilities. This data deficit makes the pricing of premiums exceptionally difficult, as the frequency and severity of digital breaches do not follow established historical patterns.
The Influence of Artificial Intelligence
The complexity of the landscape has been further intensified by the rapid integration of Artificial Intelligence (AI) into criminal methodologies. The survey results indicate that the evolution of cyber risks is outpacing the insurance industry’s ability to adapt.
“Increasingly, AI is being used in attacks,” Benito observed. “This adds a further layer of complexity owing to the fast-evolving nature of AI, with many insurers now adding AI-specific exclusions.”
The use of AI allows for more sophisticated and frequent attacks, such as highly targeted phishing campaigns and automated vulnerability scanning, which can overwhelm standard defensive measures.
Primary Challenges in Providing Cyber Insurance (Q1 2026)
| Challenge Identified | Percentage of Respondents |
| Inability to accurately assess cyber risk | 32.1% |
| Managing exposure to shared/systemic risks | 20.2% |
| Pricing volatility and loss ratios | 18.5% (approx.) |
| Other operational/regulatory constraints | 29.2% (approx.) |
Note: Data based on a poll of 109 industry respondents.
Exposure and Systemic Risks
Beyond the assessment of individual risks, managing aggregated exposure remains a critical concern. Approximately 20.2% of the 109 respondents cited the management of shared risks as a primary difficulty. High-profile attacks on cloud service providers or software supply chains can result in a “contagion effect,” where a single event impacts thousands of policyholders simultaneously.
This potential for massive, correlated claims costs raises significant questions regarding the solvency and capacity of the market. GlobalData suggests that while larger providers exhibit varying levels of appetite for such risks, smaller insurers may currently lack the infrastructure and capital necessary to enter the cyber insurance space effectively.
In conclusion, the industry’s ability to improve capacity is contingent upon better adaptability. As cyber threats continue to transition from traditional malware to AI-driven systemic events, insurers must develop more dynamic underwriting models to remain viable.