Forrester forecasts 15% growth in cyber insurance amidst AI risks
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Major transformations in the global insurance market are expected in 2026 with a priority on customer experience improvement (CX), expansion of cybersecurity coverage, and increase of microinsurance by insurers, backing of Forrester’s Predictions 2026: Insurance report.
A 15% increase in cyber insurance is what Forrester expects for the upcoming year, and the main factor behind this is the increasing number of threats related to advanced AI.
According to the research firm, the demand for cyber insurance which was quickly rising between 2017 and 2022 has slowed down after the market became mature – but the increased use of AI will push demand high again.
Insurance companies will have to stretch their roles from just paying claims to being actively engaged in defending against cyber crimes, also providing risk mitigation tools and alternative underwriting models to handle AI-related risks.
Forrester anticipates that two major property and casualty insurance providers will invest in customer experience (CX) initiatives as much as their current investments in 2026 to gain back trust and retain customers.
The consultancy has mentioned a decline in customer satisfaction scores for auto and home insurance companies in the US and Canada that was seen again in the year 2025.
In order to regain their customers, the insurers will have to be more transparent about the reasons behind the increase in rates, offer customized policy options, and improve making a claim and self-service processes to be more user-friendly.
On the other hand, microinsurance is expected to grow by 5%, mainly thanks to the increasing number of gig and freelance workers who demand insurance coverage.
According to Forrester, the global gig economy will be worth more than $600 billion by 2025, yet, insurance coverage for this sector remains quite low.
The report urges insurers to concentrate their effort in educating the customers, making the onboarding process easy and designing affordable, modular products through digital channels which are adaptable to flexible working patterns.
“AI will be both a weapon and a threat, which will lead to swift market expansion for cyber coverage. Innovative underwriting will make it possible to overtake high-risk markets, and the flourishing gig economy will give rise to new microinsurance avenues,” said Rohit Makhijani, principal analyst at Forrester.
“First movers who are going to be leaders in the future must bring in AI-powered operational efficiency, and put money into CX differentiation, and also change their way to the emerging market segments in order to be at the top of the competition,” added Makhijani.
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