The Cyber Insurance Landscape: Hardening Market in the UK

Mordor Intelligence expects the UK cyber insurance market to grow from £1.21 billion in 2025 to £2.27 billion within five years; however, as it has grown, the market has hardened, including increased premiums, narrowing the scope of coverage, and increased scrutiny of applicants.

In May 2025, the cyber attack on the retailer Marks & Spencer caused significant online disruption and a potential operational financial loss of over £300 million. The claim was reported to be £100 million to Allianz, although details of the claim will not be made public. Following that incident, the UK insurance industry has begun to evaluate risk management, especially in retail and finance.

Compliance is Now Central to Cyber Insurance

Today’s insurers do not just ask whether a business has cyber security controls in place; they want evidence of compliance with recognised frameworks and regulations. Companies should be aware that if they cannot show this evidence, they risk either denial of coverage or increased premiums.

Key UK compliance drivers in 2025:

• UK GDPR requires strong data protection and breach notification protocols
• Network and Information Systems (NIS) Regulations, which apply to essential and digital service provision
• Cyber Security and Resilience Act Bill (due in 2025) will expand reporting requirements and enhance government oversight
• FCA Cyber Security Guidance applies to regulated financial services firms and regulates defined cyber resilience controls.

Ways that compliance impacts premiums and coverage

• A lower risk profile means reduced premiums Insurers will typically provide incentives for organisations that can show risk-reducing behaviours and practices. For example, encryption, segmentation, and threat monitoring.
• Speedier Underwriting and Claim Payments Insurers can expedite policy approvals and claims assessment if there is clear incident response guidance, and they can see proof of compliance.
• Ability to Purchase Wider Coverage Some insurers will offer improved features in their policy or decrease excesses if the organisation attains baseline certification.

Security Controls Required by UK Insurers in 2025

Those UK businesses that want to be insurable or reduce costs will need to have evidence of the following security controls in place:

1. Multi-Factor Authentication (MFA)

This is now a basic requirement across almost all insurers, especially around remote access to critical digital products and privileged accounts.

2. Endpoint Detection and Response (EDR)

Most relevant entities now prefer a detection based system to legacy antivirus. EDRs usually have ransomware detection capabilities and capabilities to respond to ransomware incidents.

3. Penetration Testing and Vulnerability Management

On most insurance applications, insurers will ask for evidence of third-party pen tests and evidence for how myths manage the associated vulnerabilities.

4. Incident Response Planning

It is essential to plan your response before an incident occurs and ensure that you rehearse it. Policies must be clear on escalation, forensics, and regulatory breach notifications.

5. Cyber Security Awareness Training

People remain our biggest risk and therefore threat vector. Policies often require annual training as a condition of issuing the policy

Conclusion

Cyber insurance within the evolving threat and regulatory landscape of the UK is no longer just something passive to protect risk. It involves active compliance and evidence of cyber resilience.

This message is simple – only resilient organisations that comply will be eligible for acceptable and affordable cyber coverage in 2025 and beyond.

Ready to start your cyber resilience journey? Visit https://www.dcgsecurity.com/ today!