Global Cyber Insurance Market Overview
The key driver impacting the cyber insurance market is the growing number of cyber-attacks globally. According to the ISACA organization report cyber attacks are considered as one of the fastest expanding crimes across the US, causing disastrous business interruption Globally, Cybercrime damages are predicted to reach the U.S. $6 trillion by 2021. As per the Insurance Information Institute, Interest in cyber insurance and cyber risk persist in growing due to high-profile data breaches and awareness of the roughly endless range of exposures businesses face. In 2019 the most awful data breaches were the Capital One Financial Corp. breach in July that uncovered 100 million records and the October Adobe Creative Cloud breach that revealed 7 million users. In 2017 the most significant U.S. credit bureau, Equifax Inc., undergo a breach that shows the personal data of 145 million people, together with Social Security numbers. It was among the worst breaches on record as the amount of sensitive information stolen. In 2019, ransomware attacks got doubled from 2018. Moreover, growing awareness about business interruption (B.I.) cyber risks, with increasing usage of highly vulnerable IoT devices, contributes to market growth.
According to Value Market Research, the global cyber insurance market size was valued at around USD 6,966.5 MN in 2020 and is estimated to grow at a CAGR of about 25% during the forecast period 2021 to 2027.
The increase in the number of mandatory legislation for data cybersecurity by the government across several end-users, such as banking, I.T., healthcare, etc., is estimated to augment cyber insurance demand in the forecast period. For instance, in February 2020, the Californian assembly brings a bill to make cyber insurance obligatory to process protected and regulated personal information for all state contractors. The laws related to Data privacy, such as the Health Insurance Portability and Accountability Act (HIPAA) and Personally Identifiable Information (PII) in the U.S. The other global standards such as Payment Card Industry Data Security Standard (PCI DSS) and the European Union's (E.U.) General Data Protection Regulation (GDPR). Moreover, malware events such as Wannacry and the NotPetya case in 2017 in the U.S. have created massive awareness about the importance of cyber insurance. Consequently, the country had introduced General Data Protection Regulation (GDPR) in May 2018, thus speed up strict regulatory environments concerning data protection with the help of cyber insurance. However, high cyber insurance costs may hamper the global cyber insurance market in the long run. Also, the absence of awareness related to cyber insurance and reluctance to choose cyber insurance negatively impacts the market. The current industry trends, such as the Adoption of artificial intelligence and blockchain technology for risk analytics and exclusion of cyber insurance cover from property and casualty (P&C) insurance, are expected to provide market players with new market opportunities.
The cyber insurance market is vast, with many local and global players. The cyber insurance market is extensive, with many local and international players. The key leaders follow different strategies to advance their market position, such as amalgamation, contracts, extending product portfolio, product upgrades, and acquisitions, to augment their market share across the globe. The significant players studied in the report are American International Group, Inc., Aon plc, Allianz, American International Group, Inc, Berkshire Hathway Inc., AXA, Lloyd's of London Ltd., Munich Re, The Chubb Corporation, Lockton Companies, Inc., and Zurich.
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In this research report, the cyber insurance market is segmented by organization size, end-user, and region.
Analysis by Organization Size:
By organization size, the report is segmented into small and medium-sized enterprises (SMEs) and large enterprises. The large enterprise segment dominates the organization size segment with an 80% share in 2020. It is because large enterprises have an extensive corporate network and large companies incurred huge, financial losses reputational losses and intellectual property losses due to cyber-attacks. Moreover, the high financial stability of large enterprises allows more purchase of cyber insurance policies to protect against cyber-attacks and other risks, thus driving huge demand from large enterprises in the forecast period.
Analysis by End-User:
By end-user, the report is categorized into banking, financial services, and insurance (BFSI), it & telecom, healthcare, government, retail and e-commerce, and manufacturing. The BFSI segment dominates the end-user segment with a 20% share in 2020. It is due to the rising cases of data breaches in related to customers data & employee information that includes bank account & personal identification numbers, payment card, and other confidential details of credit card have led to the cyber insurance as prominent areas for numerous organizations in the industry. Moreover, banks are increasingly shifting their data on the cloud on account of its benefits, consequently leading to more chances of cyberattacks, thus contributing to the enormous demand from the BFSI sector in the forecast period.
Analysis by Region:
In the regional outlook of the global cyber insurance market, the North America region dominates with over 70% market share during the forecast period. It is due to the presence of prominent service providers, such as American International Group Inc., Chubb Group Holdings Inc., and Lockton Incorporated. Moreover, growing cases of malware attacks in the U.S. are creating a massive demand for cyber insurance. For instance, in 2017, per ZDNetz, around five internet-facing city servers in Atlanta were silently infected with the same exploits that were used in the WannaCry and NotPetya attacks. Moreover, increased focus on the legal framework about cybersecurity and the development of related government policies contributes to the growth of the market across North America.
Market Segmentation covered in the Report:
By Organization Size
By End User
- Banking, Financial Services, and Insurance (BFSI)
- IT & Telecom
- Healthcare
- Government
- Retail and E-Commerce
- Manufacturing
By Region
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East and Africa
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