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Cybersecurity Insurance Market

Cybersecurity Insurance Market: Information by Organization Size (Small & Medium Enterprises), End-User (Healthcare, Retail, BFSI, IT & Telecom), and Region — Forecast till 2030

Published At : 18 Aug, 2022
Updated At : 01 Sep, 2022
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Market Snapshot
Base Year:
2021
Study Period:
2020-2030
CAGR:
19.52 %
Fastest Growing Market:
Europe
Largest Market:
North America

The global cybersecurity insurance market had a revenue holding of USD 9.29 billion in 2021. It is envisioned to reach USD 38.7 billion by 2030, growing at a CAGR of 19.52% during the forecast period (2022–2030). Cyber Security insurance is a policy a person or organization can acquire to limit the financial risks of conducting business online. The insurance policy transfers some risks to the insurer for a monthly or quarterly cost. Many companies buy cybersecurity insurance plans to pay additional expenses from digital assets theft or physical damage. These expenses often cover the price of notifying clients of a security breach and the cost of regulatory compliance penalties. To be eligible for coverage, a person or an organization must typically submit to a security audit by the insurance provider or provide documentation using an assessment tool that has been approved by the insurance provider, such as one provided by the Federal Financial Institutions Examination Council.

Cyber threats are internet-based attempts to destroy or disrupt information systems and compromise sensitive data using spyware, malware, and phishing. Enterprises can monitor, detect, report, and handle cyber risks with the help of cybersecurity solutions to preserve data confidentiality. When a cyber-attack or data breach occurs, cybersecurity insurance protects enterprises from the potential consequences and assists a company in reducing risk exposure by offsetting costs. These solutions are made to pay for the fees, charges, and legal expenditures related to cyberattacks after a company has been hacked and the theft or loss of customer or employee data. The cybersecurity insurance market is primarily driven by the rising demand for compliance with various impending legislation and the increasing number of sophisticated cyberattacks heightening the fear of financial losses.

Cybersecurity-Insurance-Market-Share

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Market Dynamics

Global Cybersecurity Insurance Market Drivers

Increased Deployment of Cloud-based Services to Impede the Market Growth

One of the most quickly developing contemporary technologies is cloud computing, which breaks down traditional IT borders, opens new markets, fuels the mobility trend, and facilitates advancements in unified communications. In the current cybersecurity scenario, several tech stakeholders and businesses are turning to new insurance models to gauge the risks of retaining sensitive data. For example, cooperation between Google Cloud Business, Munich Re AG, and Allianz SE was announced in 2021 to incorporate information about client cyber risk into insurance plans. Companies looking for cyber insurance can propose that insurers extract information about their security precautions straight from their Google Cloud environments. Allianz and Munich Re will use that information to create tailored cyber insurance plans based on their environments' security.

Users can access structured and unstructured data stored in the cloud from anywhere, as cloud computing does not require any physical infrastructure. On the other side, cloud computing is regularly the target of cyberattacks, which has led to an increased need for cybersecurity insurance. A wider variety of security controls and solutions will be taken into account by insurers as the market for cybersecurity insurance continues to develop. Thus, the degree of data sensitivity and an organization's capacity to sufficiently disguise it will be crucial factors in evaluating overall risk, spurring a rise in adopting new technologies.

Global Cybersecurity Insurance Market Restraints

High Cost to Restrict Market Growth

The increased cost of cybersecurity insurance is one of the most significant reasons impeding the market's expansion. Due to the ransomware assaults over the past two to three years, insurance firms have been forced to pay out hefty claims. The expense of recovering the compromised system is substantial, even if the cybersecurity insurance firms do not pay the ransom. Cybersecurity insurance firms are raising the coverage rates to compensate for the increased costs resulting from the extra services, such as aid with data recovery following a ransomware attack. Since enterprises are more concerned with strengthening cyber security than paying insurance premiums, the adoption of cybersecurity insurance has been dragged back by rising costs.

Global Cybersecurity Insurance Market Opportunities

Use of Blockchain Technology with Artificial Intelligence (AI) for Risk Analysis to Boost Market Opportunities

AI and blockchain are rising technologies anticipated to increase risk analytics solutions' capabilities and create new business opportunities. Some of the significant issues and problems faced by cybersecurity insurance firms would be resolved by incorporating these technologies with risk analytics solutions. With the development of modern technologies, transactions and settlements may be completed more quickly, making it easier for financial institutions and their clients to make transactions and removing the need for intermediary fees. Analysis of claims, reserve management, and insurance coverage benefit significantly from using risk analytics systems.

Another area where the use of risk analytics solutions is becoming increasingly important is in the underwriting of insurance policies. Several companies in the market have begun combining advanced techniques, including statistical modeling, image processing, and machine learning (ML), to analyze data and produce insights quickly. To aid underwriters in making wise selections, vendors in the market are also delivering platforms with capabilities for quick visualization.

Segmental Analysis of the Global Cybersecurity Insurance Market

The global cybersecurity insurance market is classified based on organization size, end-user, and region.

On the Basis of Organization Size

Based on organization size, the global cybersecurity insurance market comprises Small & Medium Enterprises (SMEs) and Large Enterprises.

The Large Enterprises section is projected to advance at a CAGR of 18.31% and hold the largest market share over the forecast period. Cybercriminals have targeted large corporations; thus, these businesses must invest in adequate insurance against these attacks. Cisco's cybersecurity company Talos has asserted that it blocks 20 billion attacks every day, or nearly three times as many as there are people on the earth. Hackers once gained access to Sony's PlayStation Network, exposing the personal data (PII) of 77 million PlayStation user accounts. The PlayStation console's service was suspended for 23 days due to this breach, and users lost access to it. Cyber insurance providers have been steadily expanding their scope and product offerings to meet the growing demand from big businesses. The increasing frequency of hacking attacks, regardless of the organization's size, has increased the need for cyber insurance and coverages in large entities.

The Small & Medium Enterprises (SMEs) section will hold the second-largest market share. Cybersecurity insurance protects businesses from financial losses from cyber incidents like security breaches and theft, system hacks, ransomware extortion payments, and denial of service. Small companies that keep sensitive data online or on their computers may find this helpful coverage. Although SMEs may not have thought about cyber insurance until recently, a rapidly increasing number of SMEs will experience cyber-attacks and data breaches in the years to come. This is since these cybercriminals are fully aware that most small businesses lack the tools big companies require to safeguard their data.

On the Basis of End-User

Based on end-user, the global cybersecurity insurance market comprises Healthcare, Retail, BFSI, IT & Telecom, Manufacturing, and Others.

The Healthcare section is projected to advance at a CAGR of 20.75% and hold the largest market share over the forecast period. Malware compromising system integrity and patient privacy are two examples of cybersecurity problems in the healthcare industry. Another is distributed denial of service (DDoS) assaults that prevent medical institutions from providing patient care. Cyberattacks on the sector have grown recently due to the rising demand for telehealth visits, medical supplies, and a rush to make and distribute vaccinations. These will raise the market's need for cybersecurity insurance. The Health Insurance Portability and Accountability Act, or HIPAA Journal, states the HHS (Health and Human Service) Office for Civil Rights received 4,419 claims of healthcare data breaches affecting 500 or more records between 2009 and 2021. These breaches resulted in the loss, theft, exposure, or unauthorized disclosure of 314,063,186 healthcare records. Thus, increasing the need for cyber security insurance in the sector.

The BFSI section will hold the second-largest market share. Due to the vast clientele, the sector serves and the sensitive financial information at risk, the BFSI segment is one of the critical infrastructure areas that frequently experience data breaches and cyberattacks. Since the financial industry has a highly attractive operating model with extraordinary earnings and the plus of having relatively little risk and detectability, cybercriminals are optimizing a variety of evil hacks to paralyze it. The danger landscape for these attacks includes Trojans, ATMs, ransomware, mobile banking, data breaches, institutional invasion, data thefts, fiscal breaches, and other threats. Banking and financial institutions are increasingly recognizing the importance of cybersecurity insurance.

Regional Analysis of the Global Cybersecurity Insurance Market

The regional segmentation of the global security insurance market includes North America, Europe, Asia-Pacific, and the Rest of the World.

The Preeminence of North America

Cybersecurity Insurance Market Regional Analysis

Regional Growth Insights Request Sample Pages

North America will command the largest market share, growing at a CAGR of 15.32% over the forecast period. North America is regarded as the most significant market for cybersecurity insurance. In addition to its large market share, the region has many prominent industry participants. More data compromises were recorded in North America in 2021 than in any other year. Over the years, the region has seen many data breaches. 1,789 data breach events have been reported, according to a report issued in 2022 by the Identity Theft Resource Center.

The increased rate of data breaches motivates businesses from many industries to choose cyber security insurance, which fuels market expansion. Moreover, due to the sharp rise in the number of connected devices in the region, cyberattacks in the region's member states are on the rise and have reached an all-time high. Customers in the region use public clouds, and many of their mobile applications are already pre-loaded with their personal data for the convenience of communication, banking, and other services, thereby propelling the deployment of cyber security insurance.

Europe is predicted to generate USD 13 billion by 2030, growing at a CAGR of 23.17%. European nations like Germany are promoting themselves as technologically autonomous nations like the United States and China regarding cybersecurity. The country's government declared the establishment of a governmental agency in 2020 that would be responsible for managing cyberattacks and enhancing digital security. Additionally, the organization is expected to get USD 412 million in funding by 2023, with the money going toward ongoing innovation and countermeasures to cyberattacks. Companies have been pushed to invest considerable sums of money in dealing with the region's growing number of cybercrime events. German businesses spend 10.8% of their IT budgets on security, according to CyberEdgem. Furthermore, according to Sophos, almost 77% of German companies have cyber security insurance. Numerous businesses are spreading their presence in multiple nations to find solutions to serve the ever-growing number of users.

Players of the Market

  • XL Group Ltd
  • American International Group Inc.
  • Berkshire Hathaway Inc.
  • Zurich Insurance Co. Ltd
  • The Chubb Corporation
  • Aon PLC
  • Bin Insurer Holding LLC
  • Lockton Companies Inc.
  • SecurityScorecard Inc.
  • Allianz Global Corporate & Specialty
  • Munich Re Group

Recent Developments

  • 2022- The Chubb Corporation acquired Cigna's Personal Accident, Supplemental Health, and Life Insurance Business.

Global Cybersecurity Insurance Market: Segmentation

By Organization Size

  • Small & Medium Enterprises (SMEs)
  • Large Enterprises

By End-User

  • Healthcare
  • Retail
  • BFSI
  • IT &Telecom
  • Manufacturing
  • Others

By Regions

  • North America
  • Europe
  • Asia-Pacific
  • Rest of the World
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