Building a cyber-resilient future, together: cyber threats today require partnership between the insurance industry and the UK government

30 July 2025

Digitalisation is only increasing in the economy, while cyber threats are only growing in frequency and sophistication.[1] Every corner of our society is vulnerable to the devastating impacts of cyberattacks, as now both national and local governments, SMEs, and even large corporations face significant attacks that require expertise in complex, specialised software.

These cyberattacks, especially in the case of governments, can be fatal or endanger citizens as they potentially halt public services such as healthcare and compromise sensitive data for residents.[2] The insurance industry itself is struggling to keep pace with the rapid, AI-enhanced innovations from bad-faith actors.[3] A collaboration between the insurance industry and government is needed to meet the threats now inherent to our digital economy.

A unified front, led by the expertise from key insurance players, will enable cyber resilience that protects both our national security and economic health.

Public-private collaboration

Attacks on local councils alongside rising geopolitical tensions have shocked the UK government into developing a cybersecurity strategy spanning 2022-2030.[4] The plan envisions a resilient public sector capable of preventing, resisting, and learning from cyber threats.

Cyberattacks on government software endanger residents by releasing personal information to potentially hostile governments and disrupting public services, such as the National Health Service and public transportation. Both civil servants and insurance specialists already bring a strong foundation in risk management, but insurers have the most updated capabilities for detecting cyber threats.[5]

The frameworks outlined in the strategy share clear parallels with standard cyber insurance practice, and governments already increasingly depend on the insurance industry for their actuarial insight and analyses to inform policies regarding digital resilience standards.[6] Both sectors face the pressing need for the next generation of cyber experts. A formal career pathway sponsored by a partnership between the insurance industry and civil service can help fill the wider talent gap in our industry and keep pace with the evolving strategies of bad-actor groups.

An insurance career can then be seen as more appealing to career searchers if viewed through the lens of national and economic security. A long tradition of public-private sector partnerships, such as governments utilising universities for public health research and advancements, means a greater integration between cyber insurance professionals and government cyber-defence sectors to enable an efficient security ecosystem across enterprises that maintains a stable economic order. Cranfield University’s defence and security programme, which advises the UK’s Ministry of Defence,[7] proves the effectiveness of public-private collaboration for security measures; it is time to further ingrain these successes into our cybersecurity ecosystem.

New frameworks of risk pooling

There’s a broad misconception that the insurance industry swoops into action after a crisis to balance the books. However, insurers play a key role in advising and implementing risk mitigation strategies, and this is needed for governments’ internal security measures as well as legislating regulatory measures. Key insurance players have already completed the groundwork to inform effective compliance policies,[8] meaning a partnership between entities will maximise efficiency as cybersecurity becomes another added governmental layer within the burgeoning civil service. In turn, many insurance players are struggling to take full advantage of cyber insurance’s market potential.[9]

Many carriers struggle to enter the market due to the potential for devastating losses and market consolidation.[10] Government backing, whether at the level of the mooted “Cyber Re” or in the form of expertise-sharing, will unleash the innovation required to meet the challenges among smaller and newer players, liberating cyber resilience experts and innovators from market anxieties to focus on meeting the challenges posed by increasingly AI-driven cyber-attacks on our digitalised society.

The impact of AI

While AI is creating rapid advancements in cyber-attacks and data breaches within an industry with a reputation for slow adaptation to a digitalised economy, cyber insurance professionals remain cutting-edge in their acuity for cyber threats, and advancements in widespread software adoption are stifled by market inhibitors, poor products on the market, and a lack of consumer understanding.[11]

For innovative insurance leaders, “continuous underwriting” is a widely understood but seldom used practice that refers to constant risk assessment and adjusting processes and responses, accordingly, as opposed to implementing solutions based on the initial risk assessment.[12] While creating more robust and updated coverage solutions, the heavy costs and energy associated with continuous underwriting have prevented widespread adoption in the market. However, the scale and pace of the threat posed by cyber attackers today justify standardised continuous underwriting in cyber insurance business models. Forward-thinking carriers are already taking advantage of AI advancements that lower the costs and manpower associated with continuous underwriting.[13]

Outside of new developments in cybersecurity, leading insurers bring a tried and tested data-driven approach to understanding and monitoring risk through advanced feedback loops that automatically learns from detecting threats to maintain updated resilience measures. The government-sanctioned strategy prioritises managing risk, detecting threats, and protecting systems, which are all practices embedded throughout the insurance sector’s history. Trustworthy third-party software products require specialised expertise, easy to find in the industry. Partnerships with insurance leaders will quickly allow the government to scale its systems, networks, and keep pace with cyber threats.

The insurance industry and the UK government share an interest when it comes to protecting institutions from cyber threats. The digital revolution has come at a cost, with cyberattacks now posing an existential threat for both the private and public sectors. Their attacks span from killing small businesses to crumbling economies.

Data breaches from hostile governments both threaten our democratic institutions and endanger our citizens. The insurance industry has at times struggled to keep pace with rapid innovations from attackers due to market inhibitors, thus wasting the existing expertise and opportunities for growth. A strained public purse and skills shortage mean the UK government may get caught out on cyber breaches, rightfully undermining public trust and threatening national security. The combined strengths and resources between the government and insurance industry can build a cyber-resilient future that leaves no business, public service, or government database exposed.

By Amelia Leaphart
Public Relations and Business Development Assistant

[1] Cyber Insurance: Risks and Trends 2025 | Munich Re

[2] https://www.bbc.co.uk/news/articles/cvg8dn28241o

[3] Cyber insurance premiums stabilise in 2025, but market penetration remains below 10% for SMEs: S&P – Reinsurance News

[4] https://assets.publishing.service.gov.uk/media/61f0169de90e070375c230a8/government-cyber-security-strategy.pdf

[5] Insurance may be the hero the cybersecurity industry needs | World Economic Forum

[6] Ibid.

[7] https://www.cranfield.ac.uk/defence-and-security

[8] howden-2024-cyber-report.pdf

[9] Cyber reinsurance market share remains highly concentrated :: InsuranceERM

[10] Ibid.

[11] Ransomware Payouts Decline Despite Growing Cyber Claims Frequency – Aon Global 2025 Cyber Risk Report