Cyber insurance policies for data breaches, identity thefts, malware attacks, phishing, email spoofing, ransomware, and social engineering are being adopted by business organizations across the world, owing to the surging number of cyberattack incidents. In recent years, data has become highly vulnerable due to the deep penetration of cloud technology and connected devices. Thus, in order to prevent data thefts and breaches, many enterprises are adopting cyber insurance tools. Moreover, the rising consumer awareness about cybercrimes is also encouraging various data-intensive industries to adopt such insurance tools in abundance.
Furthermore, the increasing implementation of cybersecurity laws, on account of the surging prevalence cyberattacks, will drive the cyber insurance market at a CAGR of 26.3% during the forecast period (2020–2030). The market revenue stood at $5,573.2 million in 2019 and it is expected to reach $70,671.9 million by 2030. With the increasing incidence of cyberattacks, governments across the world are toughening their cybersecurity policies and authorities are beginning to impose heavy fines for data breaches. As a result of strengthening cybersecurity regulations, the demand for cyber insurance tools will escalate in the forthcoming years.
In recent years, the healthcare sector has become a significant user of standalone and integrated cyber insurance products and insurance, claims, and risk consulting policies, due to the rising prevalence of online financial frauds in this sector. Cybercriminals are attacking healthcare businesses for obtaining protected health information (PHI), which is worth thousands of dollars. The attackers use PHI for targeting people with scams and frauds. To avoid such data loss, companies such as AXA XL, Chubb Ltd., Berkshire Hathaway Inc., and Liberty Mutual Holding Inc. are focusing on developing new insurance tools.
The end user segment of the cyber insurance market is classified into information technology (IT) and telecom, retail and e-commerce, healthcare, manufacturing, government, banking, financial services, and insurance (BFSI), and others such as education, hospitality, and energy and utilities. Among these, the BFSI category held the largest market share in 2019, and it is expected to retain its dominance throughout the forecast period. This can be attributed to the escalating use of the cloud platform in banks and financial institutions for data storage, which makes them highly susceptible to cyberattacks.
According to P&S Intelligence, North America emerged as the largest consumer of cyber insurance policies and services in the recent past. This can be ascribed to the enactment of numerous policies regarding cybersecurity and the presence of leading cyber insurance companies, such as Chubb Group Holdings Inc., American International Group Inc., and Lockton Incorporated in the region. Moreover, the large-scale adoption of internet-based devices and services, such as online banking, e-commerce, and digital payments, in the U.S. and Canada is also fueling the adoption of cyber insurance tools in the region.
Whereas, the Asia-Pacific (APAC) cyber insurance market is expected to display the fastest growth during the forecast period. This will be due to the mounting cybersecurity challenges, such as cloud security vulnerabilities and attacks on blockchain networks, in India and China. As a result of the increasing challenges, these countries are enacting numerous cybersecurity policies which mandate the adoption of cyber insurance policies, to mitigate data and financial losses of enterprises. Moreover, the soaring public awareness about cyberattacks will also support the market growth in the region in the coming years.
Therefore, mounting cases of cyberattacks and soaring implementation of strict cybersecurity laws will augment the adoption of cyber insurance tools in the upcoming years.