Rising tensions in the Middle East are driving up the demand for cyber insurance as businesses prepare for potential digital threats linked to the conflict involving the US, Israel, and Iran. According to a recent survey by GlobalData, more insurance professionals expect cyber coverage to see the strongest growth compared to other commercial lines amid these geopolitical strains.
The poll, conducted in the third quarter of 2025, found that 27.4% of insurance experts believe cyber insurance will experience the most significant increase in demand. Political risk insurance and supply chain insurance followed closely with 25% and 23.8% respectively. This suggests that companies are bracing for both cyber attacks and physical disruptions caused by the conflict.
Cyber threats connected to state actors, sanctions, and supply chain weaknesses are now being considered alongside traditional insurance concerns like war and marine risks. Charlie Hutcherson, an analyst at GlobalData, noted that insurers are pricing in the chance of cyber escalation as part of the broader impact of geopolitical flashpoints. He explained that while shipping routes and energy corridors such as the Strait of Hormuz are under closer scrutiny, many businesses are also worried about cyber attacks spilling over into Western markets, potentially disrupting critical infrastructure and supply chains.
This heightened concern is already affecting marine insurance, with some underwriters suspending war-risk coverage for vessels near the Persian Gulf. Premiums for ships passing through key areas have increased as carriers rethink risks. The US government has also indicated it may boost political risk insurance for maritime trade and consider naval support for tankers in risky zones. All these moves are reflections of how the conflict is influencing insurance beyond the immediate region.
On the corporate side, many companies are boosting their cyber defenses. A Marsh survey of over 2,200 cyber risk leaders showed that nearly three-quarters feel confident about their cyber risk management. Two-thirds plan to increase their cybersecurity budgets in 2026, with more than a quarter expecting rises of 25% or higher. This focus on stronger security is shaping how insurers approach underwriting.
Reinsurers also foresee growth in the cyber insurance market. Swiss Re predicts global cyber premiums will rise from $15.6 billion in 2025 to about $16.4 billion in 2026. Munich Re expects that by 2030, cyber premiums could more than double, thanks to broader coverage and higher limits. In the US, direct written cyber premiums dipped slightly in 2024 as insurers tightened terms, but new reinsurance capacity entering the market is helping expand coverage options.
Looking ahead to 2026, Marsh anticipates more detailed underwriting practices. Insurers will likely demand clear evidence of each client’s cyber controls, incident response, and vendor management. Policies might differ significantly between businesses with strong cyber programs and those without. Brokers and advisors are expected to play a bigger role in helping companies align their cybersecurity efforts with insurance requirements. Small and medium-sized businesses, which often lack sufficient coverage, could see more attention as awareness grows.
Still, the cyber threat remains serious. Ransomware, system attacks, and data breaches continue to trouble organizations worldwide. Nearly 70% of companies reported at least one significant third-party cyber incident last year, highlighting risks in supply chains and third-party vendors.
All these signals show the cyber insurance market is being shaped by both geopolitical risks and companies’ stronger focus on security. As insurers adjust their appetite and pricing, and businesses invest more in resilience, cyber insurance is set to stay an important tool for managing technology-related losses on a global scale.