Cyber Insurance Market Size and Share Analysis by Policy (Data Breach, Identity Theft, Malware Attack, Phishing, Email Spoofing), Product Type (Standalone, Integrated), Service (Insurance, Claims, Risk Consulting), Enterprise (Large Enterprises, SMEs), End User (BFSI, IT & Telecom, Healthcare, Government, Retail and E-Commerce, Manufacturing) - Global Industry Demand Forecast to 2030

Market Overview

The cyber insurance market size stood at an estimated revenue of $11,904.6 million in 2022, and it is expected to grow at a CAGR of 19.1% during 2022–2030, to reach $48,328.4 million by 2030. This is ascribed to the increasing number of virus, malware, and other types of attacks on IT networks, the surging legislation concerning cybersecurity, and the implementation of related insurance as a risk mitigation strategy.

For instance, according to Consumer Sentinel Network, more than 390,00 reports of government benefits fraud in 2021 were received, which was roughly in line with the 394,324 reports registered in 2020. Owing to such an increase in attacks on IT networks, legislation in numerous countries has mandated the implementation of improved and enhanced security policies to protect consumers’ personal details on the basis of moral and ethical criteria.

Moreover, organizations can reduce the effect of such events with the help of a robust insurance policy. It shields companies against expenses of internet-based attacks on IT infrastructure, information policy, and governance, which frequently are not covered by conventional reimbursement packages. In addition, several nations sanction businesses for any breach of critical records and set controlling terms and conditions. Also, cybercriminals attack regularly on small and medium-sized businesses, due to their weak cybersecurity solutions. This increases the need for comprehensive policies among these businesses.

Rising Cyber Insurance Demand in Healthcare Industry

During the forecast period, the healthcare category is projected to witness the fastest growth, advancing at a CAGR of over 20%. The increasing digitalization and growing penetration of the internet in the healthcare sector for easy access to individual’s information have created online vulnerabilities, due to which crucial records are being exposed to internal and external threats.

Owing to such factors, the healthcare vertical has become a major target for attackers over the past few years. Thus, to protect themselves from malicious intent and mitigate related losses, several healthcare organizations are opting for cyber insurance. Related policies cover data breach-, hacking-, and digital security-related issues. These also help organizations cover legal fees, in addition to hardware, software, damaged network, and associated losses.

Also, the healthcare vertical is a major target of cybercriminals, as in the black market, stolen protected health information (PHI) is worth hundreds, even thousands of dollars. According to the Center for Internet Security (CIS), for healthcare organizations, the average cost incurred due to a data breach, per stolen record, is around $355, as compared to the average cost incurred due to a data breach for non-healthcare-related organizations, per stolen record, is around $158.

This is because an individual’s personal health history, which includes illnesses, ailments, and surgeries, cannot be changed, unlike social security numbers or credit card information. For attackers, PHI is valuable, as they can use this information to target victims with scams and frauds that take advantage of the victim’s settlements or medical conditions. Furthermore, it can also be used to make fake insurance claims, enabling attackers to engage in the resale and purchase of medical equipment, in the name of a medical center. Such factors are leading to the rising trend of the increasing adoption of cyber insurance services in the healthcare sector.

North American Has the Presence of Prominent Service Providers

Globally, North America is estimated to have accounted for the largest revenue share, around 50%, in 2022. This is ascribed to the presence of major companies, such as American International Group Inc., Chubb Group Holdings Inc., and Lockton Incorporated, in the region. Furthermore, the increased focus on the legal framework pertaining to cybersecurity and the development of related government policies are other factors helping the regional market to grow. Mandatory legislation with respect to the security of IT infrastructure in several states in the U.S. and the rising adoption of these policies among SMEs in the region have led to the larger adoption of insurance policies.

Moreover, the rising number of data breaches and faster adoption of next-generation technologies in the region such as machine learning (ML), cloud computing, and computer vision, in varied areas of businesses; the surging awareness toward the protection of customers’ confidential information such as social security numbers, pan card details, and health records; and the increasing need for coverage of financial losses are benefiting the growth of the North American market.

In contrast, the APAC market is projected to attain the fastest growth during the forecast period. Several developing economies in the region, including China and India, are facing cloud security vulnerabilities and attacks on blockchain systems. Owing to this, governments of these economies are taking strategic measures, such as the implementation of policies to enhance IT security and the launch of initiatives to spread awareness regarding cyberattacks.

This has encouraged market players to potentially take advantage of the opportunity by offering insurance policies to cover the losses. Also, players introduce advanced insurance products, in order to cater to the growing business need and protect enterprises from an increasing number of cyberattacks. Thus, the increasing focus on cybersecurity is resulting in the adoption of such reimbursement policies among companies, which, in turn, is contributing to the growth in the APAC market.

Data Breaches Have Risen Exponentially in Recent Years

The data breach category is estimated to have held the largest share in 2022. With organizations becoming more reliant on cloud computing, digital data, and workforce mobility, cases of breaches of sensitive information have risen exponentially. Sensitive information of customers and organizations is generally stored on enterprise databases, local machines, and cloud servers, which, sometimes, are susceptible to breaches.

In the past couple of years, several large companies and federal departments, such as the U.S. Office of Personnel Management (OPM), Anthem Insurance Companies Inc., Uber Technologies Inc., Quora Inc., Facebook Inc., Cathay Pacific Airways Ltd., Marriott International Inc., and Equifax Inc., have experienced data breach threats. In this regard, cyber insurance helps organizations cover both first- and third-party financial losses that result from such breaches that may compromise sensitive company and customer information.

Standalone Product Type Contributed Majorly To Global Revenue

The standalone category is estimated to have held a larger share, around 60%, in 2022. Standalone policies provide organizations with the ability to instantly compensate first- and third-parties for losses in the event of a data breach. These policies reimburse the costs insured due to a breach, such as IT forensic costs, credit-monitoring costs, data restoration costs, cyber extortion (including ransom payments to hackers), and public relations expenses. Furthermore, these cover an insured’s legal liability to third parties and direct financial loss arising from social engineering frauds, phishing, spoofing, phreaking, and other kinds of IT-related frauds.

During the forecast period, however, the integrated category is projected to attain faster growth. Integrated policies are often purchased by SMEs to cover data breach losses, cyber extortion, information replacement and restoration expenses, and business interruption costs. With the rise in the number of SMEs globally, the demand for integrated cyber insurance policies is also projected to increase.

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BFSI Is the Major End User

The BFSI category is estimated to have accounted for the largest revenue share, over 25%, in 2022, and it is also projected to dominate the market during the forecast period. BSFI companies have substantially transformed themselves technologically to meet the evolving needs of customers. From handling paper records to providing one-click payment options and facilitating online purchases, banks and insurance companies have largely invested in advanced technologies to enhance the customer experience. While technology adoption has aided their business growth in several ways, it has also increased cybersecurity concerns in such organizations.

Furthermore, earlier companies in the BFSI sector maintained in-house servers in order to cater to the requirements of local customers. However, banks are now increasingly shifting their workflow to the cloud on account of its benefits. Besides, many organizations are now working on a hybrid model for the management of data. The hybrid model is considered safe, but the rising use of advanced login features, such as one-time-password-based login, is resulting in more complaints of hacking and phishing from customers. Such factors are resulting in the larger adoption of cyber insurance policies by BFSI companies.

Key Players in the Cyber Insurance Market Are:

• American International Group Inc. (AIG)
• Chubb Limited
• Zurich Group
• Berkshire Hathaway Inc.
• Munich Re Group
• Lockton Companies Inc.
• Allianz SE
• Arthur J. Gallagher & Co.
• The Travelers Companies Inc.
• Fairfax Financial Holdings Limited

Cyber Insurance Market Size Breakdown by Segment

The report analyzes the impact of the major drivers and restraints on the market, to offer accurate market estimations for 2017–2030.

Based on Policy

• Data Breach
• Identity Theft
• Malware Attack
• Phishing
• Email Spoofing

Based on Product Type

• Standalone
• Integrated

Based on Service

• Insurance
• Claims
• Risk Consulting

Based on Enterprise

• Large Enterprises
• Small- and Medium-Sized Enterprises (SMEs)

Based on End User

• Banking, Financial Services, and Insurance (BFSI)
• IT & Telecom
• Healthcare
• Government
• Retail and E-Commerce
• Manufacturing

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • U.K.
  • Germany
  • France
  • Italy
  • Spain
• Asia-Pacific (APAC)
  • China
  • Japan
  • India
  • South Korea
  • Australia
• Latin America (LATAM)
  • Brazil
  • Mexico
• Middle East and Africa (MEA)
  • Saudi Arabia
  • U.A.E.
  • South Africa