Forrester forecasts 15% growth in cyber insurance amidst AI risks

Insurers are advised to offer tools for risk mitigation and new underwriting models.

The global insurance industry is set for major shifts in 2026 as insurers focus on improving customer experience (CX), expand cyber coverage, and grow microinsurance offerings, according to Forrester’s Predictions 2026: Insurance report.

Forrester expects cyber insurance to grow by 15% next year, driven by rising AI-related threats. 

The research firm said cyber insurance, which saw rapid expansion between 2017 and 2022, slowed as the market matured – but the widespread use of AI will reignite demand. 

Insurers will need to go beyond paying claims and take on a more active role in cyber defence, offering tools for risk mitigation and new underwriting models to manage AI-related risks.

On the customer experience front, Forrester predicts that three major property and casualty insurers will double their CX investments in 2026 to rebuild trust and improve retention. 

The firm noted that customer satisfaction scores for auto and home insurers in the US and Canada fell again in 2025. 

To recover, insurers will need to explain rate increases more transparently, offer personalised policy options, and make claims and self-service processes easier to use.

Meanwhile, microinsurance is forecast to expand by 5%, supported by rising demand from gig and freelance workers. 

Forrester estimates the global gig economy will exceed $600b by 2025, but insurance coverage for this group remains limited. 

The report urges insurers to improve education, simplify onboarding, and design affordable, modular products through digital channels that fit flexible work patterns.

“AI will be a weapon and a threat, creating rapid market expansion for cyber coverage. Novel underwriting will unlock high-risk markets, and the booming gig economy will create new microinsurance opportunities,” Rohit Makhijani, principal analyst at Forrester, said.

“Leaders must embrace AI-driven operational efficiency, invest in CX differentiation, and adapt for emerging market segments to stay ahead of competition,” Makhijani added.