Insurance industry bucks trend of dwindling growth in security budgets across sectors

By Mia MacGregor

Aug 12 - (The Insurer) - The insurance industry has remained resilient against dwindling growth in security budgets affecting several sectors, according to a new report from security insights provider IANS Research.

The Security Budget 2025 Benchmark Summary report highlighted a significant decline in average security budget growth, dropping to 4% in 2025 from 8% in 2024, marking the lowest increase in five years.

While sectors such as healthcare, professional services and retail faced the steepest cuts, insurance, financial services and technology maintained growth above 5%. IANS noted that this disparity reflects uneven impacts of economic instability across industries.

Security budgets as a percentage of IT spending fell to 10.9% this year, down from 11.9% in 2024, breaking a steady upward trend seen since 2020. The shift is attributed to a resurgence in IT investment, particularly in artificial intelligence and cloud infrastructure.

Staff growth in security teams also hit a four-year low, averaging 7%. Most chief information security officers reported either stagnant or shrinking teams, though the insurance and financial sectors saw expansions amidst record profits and stability, according to the report.

Additionally, only 45% of CISOs were able to add net new headcount, down from 67% three years ago and 51% in 2023. Only 11% of CISOs indicated their organizations are adequately staffed, and more than a third said they are stretched thin.

The widespread staffing shortages have led to delays in security initiatives, morale issues, increased risk of noncompliance and elevated organizational risks, according to IANS.

“Once again, we find security is not immune to macro conditions. Most CISOs are not receiving budget increases despite security typically being identified in the top five risks for companies,” said Steve Martano, partner in the cyber security practice at Artico Search.

“We continue to hear that CISOs have budget for tooling but not for staff increases, which leads to teams not being staffed adequately to take advantage of a tool’s full capabilities,” he added.