Cyber insurance is designed for organizations that have suffered a cyber-related security breach. Cyber insurance provides protection for businesses against cyber threats such as malicious hacks, data breaches, distributed denial of service (DDoS), malware and ransomware. It provides financial protection for sensitive customer information such as credit card numbers, social security numbers, and account numbers.
The global cyber insurance market size was USD 8,642,2.6 million in 2021. Market.us projects that the market will grow at a 26.2% annual rate over the forecast period.
The increasing digitalization of businesses and economies has presented many challenges in managing digital security and privacy. Due to the rapidly rising incidences of cybercrimes and digital frauds, threats and data breaches, managing internet and online risk has become a top priority for businesses. This is one of the main reasons cyber insurance is in high demand to cover the company’s costs and allow it to continue its core operations. Cyber insurance is becoming increasingly popular in medium and small-sized businesses (SMEs) as it helps protect against data breaches and protects networks.
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The main factors driving the growth of cyber insurance markets are increased awareness of cyber risks associated with business interruption (BI), and the increasing number of mandatory legislations governing data security at different end-users such as banks, healthcare, and other. The insurance industry plays an important role in helping consumers and businesses to manage cyber risk. Insurance also provides financial protection for policyholders against cyber attacks that are not completely prevented.
Market driving factors
Cybercrime and data breaches are on the rise all over the world. According to the Checkpoint report, there was a 93% increase in ransomware attacks in 2020, and that 6 out of 10 companies were affected by the attack. This is expected to drive the growth in cyber insurance. The demand can be further supported by the introduction of data privacy laws like the Health Insurance Portability and Account Act (HIPAA), and the EU’s General Data Protection Regulation (GDPR).
The rate of cyberattacks has increased dramatically due to digitization, especially during the COVID-19 pandemic. Complex governance regulations and data security regulations will drive future adoption of cybersecurity insurance markets.
Market Restrictions: High Service Prices
The cyber insurance market can be hampered by rising premiums and the addition of charges for data recovery or negotiation with hackers. Insurance companies are raising their premium costs, which is limiting the ability to continue with an insurance policy. As premium rates rise by 30%, companies like American International Group Inc. reduce coverage limits as the cost increases. Small and medium-sized businesses are therefore more likely to be covered. As cybersecurity insurance prices rise, adoption has been slow. Organizations are now more focused on increasing cyber security than paying the premium.
Key Market Segments:
Organization
SMB
Large Enterprise
Application
IT & Telecom
BFS
Healthcare
Retail
Other Applications
Market Key Players:
AON Plc
American International Group Inc.
Berkshire Hathaway
Allianz Group
Berkshire Hathaway
Lockton Companies, Inc.
The Chubb Corporation
Munich Re Group
Other Key Players
KEY INDUSTRY DEVELOPMENTS
Microsoft created Defender in May 2022 to help SME security and reduce cyber risk. This solution offers end-point security. It includes Endpoint Detection and Response.
Prevalent created Connector Marketplace in October 2021. It has enhanced capabilities that include new ESG findings and regulatory findings. This will provide a holistic view of enterprise risk management.
September 2021-Zurich Insurance Group collaborated with BOXX Insurance,aToronto-based insur-tech firm. Through its collaboration with BOXX, the company aims to improve its customer-focused solution for cyber protection for its partners and customers.
February 20, 2121 – The Chubb Corporation launched digital insurance products under its BLINK suit. BLINK products provide personal cyber protection in 25 states.
Key regions divided during this report:
– The Middle East and Africa Cyber Insurance Market (Saudi Arabia, United Arab Emirates, Egypt, Nigeria, South Africa)
– North America Cyber Insurance Market (United States, Canada, Mexico)
– Asia Pacific Cyber Insurance Market (China, Japan, Korea, India, Southeast Asia)
– South America Cyber Insurance Market (Brazil, Argentina, Colombia)
– Europe Cyber Insurance Market (Germany, UK, France, Russia, Italy)
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