Government regulations mandating the implementation of effective cyber-security measures to prevent data theft and economic loss are propelling the cyber insurance market. For instance, the Global Data Protection and Regulation (GDPR) implemented by the European Parliament and Council primarily deal with offering individuals control over personal data with the help of effective technical measures. Companies violating this regulation will be liable to face legal action.
The global cyber insurance market can be segmented by product, enterprise, and application.
Based on product, the market can be segmented into standalone cyber insurance and packaged cyber insurance. Several organizations are seeking comprehensive and innovative insurance products on account of the rising concerns regarding cyber exposure.
Based on enterprise, the market can be segmented into small and medium enterprises and large enterprises. In a majority of cases, larger companies are more likely to purchase cyber-insurance as compared to small enterprises. The growing awareness among these enterprises regarding cyber exposure and the associated risk has compelled small business entrepreneurs to opt for cyber insurance to cover financial risks.
Based on application, the market can be segmented into financial institutions, retail & wholesale, healthcare, business services, manufacturing, technology, and others. Healthcare is one such industrial sector largely threatened by cybersecurity risks as the mobility and volume of electronic health records are surging issues regarding data privacy.
The global cyber insurance market has been studied across North America, Europe, Asia Pacific, and Latin America and the Middle East and Africa (LAMEA).
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North America, being a technologically-advanced region, offers significant prospects for cyber insurance. The management of cyber risk through an insurance policy is relatively new to adapt concept. With every announcement of a major system failure leading to huge losses, consumer awareness regarding the security of business operations is rising.
Asia Pacific offers dynamic growth prospects in the cyber insurance market, owing to growing cyber threat and increasing incidents of cybercrime and data breach, which in turn can be attributed to the relatively high number of developing businesses in the region, as compared to North America and Europe. According to the 2017 edition of the Global Risks Report published by the World Economic Forum, cyber-attacks are ranked among the top five risks of doing business in Asia Pacific.
Europe has been witnessing an increase in the number of cyber-attacks. For instance, according to the Cyber-Crime Report for Europe 2018, digital transactions in Europe were hit by over 30% cyber-attacks in the first three months of 2018. Therefore, the spending on security solutions has boosted and the demand for cyber insurance is has increased.
The Latin America and Middle East & Africa region is an opportunistic market for cyber insurance. According to Cisco, in 2018, cyber-attacks in 48% of the Middle East and Africa companies resulted in USD 500,000 worth of losses, while 58% of the businesses had to manage an outage of more than five hours due to a breach. Thus, the high incidence of cyber-attacks in the region is creating a boom in the cyber insurance space.
Some of the major market players operating in the cyber insurance market are The Chubb Corporation, American International Group, Inc., XL Group Ltd, Allianz Global Corporate & Speciality, Lloyds, AON PLC, Munich Re Group, Lockton Companies, and Zurich Insurance Co. Ltd.
Cyber Insurance Market Segmentation