Artificial intelligence will be a “key focus” for the cyber insurance industry as attackers and defenders aim to deploy it.

S&P Global Ratings’ new cyber outlook says AI is accelerating the automation of hacking, particularly in relation to tailored phishing and email extortion, which can now be translated into multiple languages to increase scale.

Ransomware as a service, where criminals deploy pre-developed ransomware tools, is also expected to increase with the support of AI.

“We expect that understanding the implications of AI for cyber insurance will be a key focus for the industry over the next two years and that the threat landscape will continue to evolve dynamically, shaped by the battle between attackers seeking to exploit vulnerabilities and defenders seeking to close them,” the report says.

“That interaction will influence claims development and, consequently, the loss ratios within the cyber insurance industry in the years ahead, as will the industry's own approach to adopting to AI tools, notably to effectively evaluate and price emerging risks.”

The report says annual global cyber premium is likely to increase by 15%-20% a year, to about $US23 billion ($35.29 billion) by the end of 2026.

This compares with $US14 billion ($21.48 billion) at the end of last year.

“S&P Global Ratings’ stable view of the global cyber insurance and reinsurance industry is supported by its solid underwriting profitability in 2023 and 2024, and our expectation that this will continue over 2025,” the report says.

“The industry is still benefiting from substantial increases in rates on cyber insurance and a tightening of the terms and conditions on cyber policies, which was mainly implemented in 2021 and 2022.”