Cowbell, a cyber and specialty insurer focused on SMEs, expects the cyber market to keep expanding at great speed through 2026.
Rising cyber threat levels will push insurers to tighten controls, broaden pre and post-incident services and offer clearer, more usable cover.
According to Beinsure, that shift has been building for a while, but next year could be the point where it becomes the baseline.
Simon Hughes, SVP for Global Distribution and GM UK, said insurers are moving from straight risk transfer to something closer to partnership.
Cowbell uses continuous risk assessment to give policyholders a live view of their cyber hygiene instead of relying on a static questionnaire.
Underwriting shifts with the data, he said, with limits, conditions and cover adjusted to the policyholder’s current posture, not whatever they typed into a form six months ago.
Incident response readiness is also creeping into standard packages, meaning support starts long before a breach hits.
Cowbell’s 2026 outlook warns that system failures and supply chain attacks keep climbing. More SMEs now depend on outsourced IT setups, so large-scale outages and targeted attacks land harder and more often. The firm’s take is blunt: data is the new hostage.
Threat actors see more value in stealing sensitive information than locking up an entire network, and that pivot usually drags out recovery timelines and increases total cost.
Claud Bilboa, RVP for Underwriting and Distribution, said attackers are still hammering ransomware, but tactics shift toward data theft as criminals chase the value in personal information. He expects that trend to carry straight into 2026.
Non-malicious failures also rise, adding a different flavour of cyber loss for insurers. These cases still cost plenty, and the clean-up can take years thanks to regulatory processes and individual claims.
Cowbell warns that attackers now fold artificial intelligence into their playbook. Some groups test quantum-aware encryption as they plan for a post-quantum world.
Kirsten Maley, Director of Claims UK, said AI makes attacks more accessible to low-skill actors and raises the sophistication of high-skill ones. She expects cybercrime and business email compromise to tick up sharply in 2026, driven by AI-enhanced tactics.
Hughes said deepfakes and generative AI push phishing into new territory. CFOs have already authorised payments based on voice-cloned calls or synthetic emails.
Signs of quantum-aware encryption testing add more tension as threat groups prepare for future crypto-breaking tech.
Manufacturing, healthcare, the public sector, retail and education stay prime targets. Hughes said education is getting hit harder because systems are outdated and cyber maturity remains low. Vendors offering security-as-a-service also become gateways into bigger enterprises as outsourcing grows.
Bilboa pointed out that many of these sectors underinvest in modernising their IT and OT environments. They rely on legacy systems that create easy openings.
Attackers favour them either for their operational sensitivity, like manufacturing, or because they hold troves of valuable data.
He closed with a warning that prevention never stays still. In his words, it’s not if but when, and SME leaders should stop pretending otherwise.
