Cyber Insurance Market Research Report: By Policy (Data Breach, Identity Theft, Malware Attack, Phishing, Email Spoofing), Product Type (Standalone, Integrated), Service (Insurance, Claims, Risk Consulting), Enterprise (Large Enterprises, SME), End User (BFSI, IT & Telecom, Healthcare, Government, Retail and E-Commerce, Manufacturing) - Global Competition Analysis and Revenue Forecast to 2030

Market Outlook

The cyber insurance market revenue stood at $5,573.2 million in 2019, and the market is predicted to grow at a CAGR of 26.3% between 2020 and 2030. The increasing prevalence of cyberattacks, swift digitalization of business operations, increasing implementation of government policies regarding cybersecurity, and mushrooming adoption of cyber insurance policies for mitigating risk are driving the expansion of the market.

The ongoing COVID-19 pandemic is making organizations adopt remote working, or work-from-home policies. This is, in turn, pushing up the requirement for enterprise virtual private network (VPN) servers, with their security and availability becoming a major focus area. However, a company’s improper cybersecurity measures can lead to misconfigurations in the VPNs, which may subsequently expose sensitive information or data over the internet. This can also make the operating devices highly vulnerable to denial of service (DoS) attacks. Because of these reasons, the COVID-19 pandemic is positively impacting the industry growth.

Data Breach Policy Dominated Market

The data breach category held the largest share in the market for cyber insurance in 2019, under the policy segment. The incidence of data breaches has grown massively in recent years because of the rising adoption of cloud computing solutions, workforce mobility, and digital data. The sensitive data of organizations and customers is usually stored on the databases of enterprises, cloud servers, and local machines, which are sometimes vulnerable to data breaches. During the first six months of 2019, over 3,800 data breach cases across the world exposed 4.1 billion digital records.

Integrated Category Predicted To Exhibit Faster Growth in Coming Years

The integrated category is predicted to demonstrate the faster growth in the cyber insurance market in the coming years, under the product type segment. This is ascribed to the soaring adoption of integrated solutions by small and medium enterprises (SMEs) for covering data breach losses, data replacement and restoration expenses, business interruption costs, and cyber extortion. Hence, with the surge in the number of SMEs, the requirement for integrated cyber insurance policies is set to grow rapidly in the coming years.

Insurance Held Largest Share in Market

The insurance service category held the largest share in the market for cyber insurance in 2019. This is attributed to the high prevalence of cyberattacks, such as data breaches, email spoofing, malware attacks, ransomware, and phishing, and the incurring of huge financial losses and damage to brand reputation and identity because of them. Thus, in order to get coverage against these attacks and avoid financial losses, businesses are increasingly adopting cyber insurance policies.

SMEs Predicted To Grow Faster in Market in Coming Years

The SMEs category is predicted to demonstrate the faster growth in the coming years, under the enterprise segment of the cyber insurance market. In the past, SMEs were not equipped with the required security infrastructure, and therefore, they were highly vulnerable to cybersecurity threats. Moreover, it was quite difficult to buy cyber insurance for these organizations in the past, as the policies were expensive and often inaccessible. However, with the emergence of digital-first insurance providers, the adoption of cyber insurance solutions by SMEs is surging, as these insurance providers have significantly reduced the distribution costs.

BFSI Dominant End-User Sector in Market

The banking, financial services, and insurance (BFSI) end user category dominated the market in 2019, and this trend is predicted to continue in the coming years. BFSI organizations have experienced a complete technological transformation over the last few years in order to meet the evolving requirements of customers. Banks are rapidly shifting their data to the cloud due to its various benefits; however, this is making their data more susceptible to cyberattacks. As a result, companies operating in the BFSI sector are increasingly adopting cyber insurance policies, thereby fueling the expansion of this category.

North America Was Largest Market Historically

North America dominated the market between 2014 and 2019. The major factor responsible for the region’s dominance on the cyber insurance market is the existence of major cyber insurance organizations, such as Chubb Group Holdings Inc., Lockton Incorporated, and American International Group Inc. Furthermore, the enactment of various policies focusing on the legal framework regarding cybersecurity propelled the expansion of the market in this region.

Asia-Pacific (APAC) Predicted To Exhibit Fastest Growth in Future

The market is predicted to demonstrate the fastest growth in the APAC region in the forthcoming years. This will be because of the growing cybersecurity challenges, such as attacks on blockchain systems and cloud security vulnerabilities, in India and China. As a result, these countries are enacting policies for enhancing cybersecurity and raising public awareness about cyberattacks. The increasing awareness about cyberattacks is, in turn, encouraging the industry players to offer insurance policies that can cover cyber risks and support the cybersecurity strategies of companies.

Mushrooming Cyber Insurance Demand in Healthcare Industry Major Market Trend

Over time, the healthcare sector has become a major end user in the cyber insurance industry on account of the surging prevalence of cyberattacks, which is causing major financial losses healthcare businesses. As stolen protected health information (PHI) is worth thousands of dollars, cybercriminals are increasingly targeting the healthcare sector. For them, PHI is highly valuable as they can use it for targeting people with frauds and scams. These factors are fueling the requirement for cyber insurance solutions in the healthcare sector.

Growing Prevalence of Cyberattacks Driving Market Growth

One of the major cyber insurance market growth drivers is the increasing prevalence of cyberattacks, including the breach of personal data and sensitive information. According to various reports, nearly 8 billion records, including phone numbers, credit card numbers, home addresses, and various other types of highly confidential and sensitive information, were exposed in data breaches between January 2019 and April 2020.

Implementation of Legislations Regarding Cybersecurity also Fueling Market Expansion

The increasing digitization of business operations and rising penetration of the internet are fueling the prevalence of cyberattacks and vulnerabilities, which is, in turn, augmenting security risks for organizations. Therefore, in order to reduce the incidence of cyberattacks, the governments of several countries are enacting policies that mandate the adoption of cybersecurity measures. As these policies become stricter and authorities begin imposing heavy fines for data breaches, the demand for cybersecurity solutions, including cyber insurance, will rise sharply, which, in turn, will propel the expansion of the cyber insurance market.

Adoption of Cybersecurity Insurance as Risk Mitigation Strategy Propelling Market Growth

The increasing incidence of cyberattacks, growing public awareness about cybersecurity and related insurance, and rising implementation of government policies are the main factors fueling the adoption of cyber insurance solutions for risk mitigation. With the increasing implementation of various cyber-risk-related policies, such as requirements for notifications, the sale of cyber insurance is growing rapidly. This is because industries are increasingly looking at cyber insurance solutions as a means to effectively deal with cyber risks.

Market Players Launching New Products to Gain Competitive Edge

The cyber insurance market is fragmented and competitive in nature, with the presence of a large number of players. Some of the key payers operating in the industry are Chubb Limited, American International Group Inc. (AIG), AXA XL, Beazley Plc, and The Travelers Companies Inc., and these companies cumulatively hold a significant share in the market.
In recent years, players in the cyber insurance market have launched a number of products to stay ahead of their competitors. For instance:

• In February 2020, Beazley Plc announced the launch of its Virtual Care insurance policy in the U.S. to offer protection against the risks associated with technology-enabled healthcare and lifestyle management services. The product covers e-crime, business interruption loss, dependent business interruption, data recovery loss, cyber extortion loss, and crypto jacking.
• In September 2019, The Travelers Indemnity Company announced the launch of Travelers Catastrophe Map Viewer, a new capability that provides agents and brokers with before-and-after photos of areas affected by disasters. It provides high-resolution aerial images after a catastrophic event before anyone can physically access the location. The tool enables agents and brokers to quickly notify customers about the condition of their property and begin the claim process when necessary.

Some of the key players operating in the cyber insurance market are mentioned below:

Cyber Insurance Market Size Breakdown by Segment

The cyber insurance market report offers comprehensive market segmentation analysis along with market estimation for the period 2014–2030.

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.
  • Turkey
  • South Africa