April 23, 2024
Cyber Security Insurance Market

The Rapid Expansion Of Digital Technologies Opens New Avenues For Cyber Security Insurance Market

The Cyber Security Insurance Market is estimated to be valued at US$ 13.62 Bn in 2023 and is expected to exhibit a CAGR of 21. % over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

Cyber security insurance provides coverage against internet-based risks, and costs related to cyber attacks, data breaches, and privacy violations. It helps in reimbursing organizations for expenses associated with notifying customers of a breach, investigating the cause of the breach, restoring hacked systems, and paying for any stolen funds. Common cyber policies protect against business interruption, extortion threats, network security liability, privacy liability, and media liability. They are gaining prominence as cyber-crimes continue to grow rapidly while causing significant financial losses to governments and businesses.

Market Dynamics:

One of the primary drivers facilitating the growth of cyber security insurance market is the increasing number of cyber-attacks and data breaches. Cybercrime has become a major threat for governments and enterprises as cyber attackers continuously develop sophisticated techniques to steal sensitive data. As per a report by Cybersecurity Ventures, global cybercrime costs are predicted to reach $10.5 trillion annually by 2025, increasing the demand for cyber risk transfer solutions like insurance. In addition, stringent data privacy regulations such as General Data Protection Regulation (GDPR) are compelling organizations across industries to purchase cyber liability policies and demonstrate compliance. Non-compliance can result in heavy fines, thereby boosting the adoption of cyber insurance.

Segment Analysis

The global cyber security insurance market is segmented on the basis of type, organization size, industry verticals and geography. Based on type, the market is segmented into standalone cyber insurance, packaged insurance. Standalone cyber insurance dominates the market as it provides comprehensive coverage including breach response cost, loss resulting from business interruption, regulatory fines among others. Further, on the basis of organization size, the market is segmented into large enterprises and small & medium enterprises (SMEs). Large enterprises dominate the segment owing to their large network infrastructure and critical data which makes them susceptible to cyber attacks. By industry verticals, the market is segmented into healthcare, retail, BFSI, IT & telecom, manufacturing among others. BFSI industry dominates the segment owing to increasing number of cyber incidents in the industry involving customer data theft.

PEST Analysis

Political: Stringent data privacy regulations like General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) have increased demand for cyber insurance to address financial and legal responsibilities arising due to data breaches.

Economic: Stable global economic growth has increased digital transformation across industries raising need for protecting critical assets and intellectual property from complex cyber threats.

Social: Rising instances of cyber crimes like data theft, ransomware attacks have bolstered awareness among individuals and enterprises about risks of online data and networks security failures.

Technological: Growing utilization of advanced technologies like cloud, IoT and mobility has expanded connectivity but also aggravated security vulnerabilities which cyber insurance help mitigates risks from sophisticated cyber attacks.

Key Takeaways

The Global Cyber Security Insurance Market Growth is expected to witness high, exhibiting CAGR of 21% over the forecast period, due to increasing digitization across industries and rising sophistication of cyber-attacks. The market size for 2023 is estimated to be US$ 13.62 Bn.

Regionally, North America dominates the global cyber security insurance market owing to stringent data privacy regulations and increasing spending on cyber security measures by enterprises in the region. Asia Pacific is expected to exhibit fastest growth aided by rapid digital transformation and increasing internet penetration in the region.

Key players operating in the cyber security insurance market are Berkshire Hathaway Inc., XL Group Ltd, Munich Re Group, Aon PLC, The Chubb Corporation, American International Group Inc., Allianz Global Corporate & Specialty, Zurich Insurance Co. Ltd, Lockton Companies Inc., Bin Insurer Holding LLC and SecurityScorecard Inc. These players are focusing on partnerships, mergers and acquisitions to strengthen their product portfolio and geographical presence. For instance, in 2023 Munich Re Group acquired RSUI Group to expand its digital infrastructure risk business.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it