Cybersecurity Insurance Market - By Component (Solution, Services), By Enterprise Size (Large Enterprise, SME), By Insurance Type (Packaged, Standalone), By Coverage Type (First-Party, Liability Coverage), By End Use, & Forecast 2024 – 2032

Cybersecurity Insurance Market Size

Cybersecurity Insurance Market was valued at USD 16.4 billion in 2023 and is projected to register a CAGR over 20.5% between 2024 and 2032. The market is driven by stringent regulatory compliance across several economies. Also, data protection and cybersecurity regulations have become more stringent globally. For instance, the General Data Protection Regulation (GDPR), the most stringent data protection regulation in the world adopted by the European Union, applies to all organizations that process the personal data of individuals located in the European Economic Area (EEA), regardless of the organization's location. The GDPR has strict requirements for how personal data is collected, used, and stored. It also gives individuals strong rights over their data, such as the right to access, correct, and delete their data. Organizations may be legally required to carry cybersecurity insurance to comply with these regulations and manage potential liabilities, leading to healthy market growth.
 

A noteworthy rise in cybersecurity incidents and associated costs could drive the cybersecurity insurance business through 2032. Cybersecurity incidents can result in significant financial losses, including data recovery, business interruption, legal expenses, and reputation damage. According to a study conducted by Comparitech, 108 individual ransomware attacks affected 2,302 medical organizations in 2021, impacting 19.76 million patient records. These attacks cost medical entities an estimated USD 7.8 billion in downtime alone. Cyber insurance provides financial protection against these potential losses, adding to its popularity among organizations.

However, some businesses might be hesitant to purchase cyber insurance due to concerns about sharing sensitive data with insurance companies and potential legal implications in the event of a cyber incident. Also, the absence of standardization across cyber insurance policies can create confusion and hinder the comparison of different offerings. This lack of standardization can make it difficult for businesses to select the most suitable policy for their needs, driving down market growth.
 

COVID-19 Impact

The COVID-19 had a notable impact on the cybersecurity insurance market due to the surge in remote work and digitalization during the pandemic. The rapid shift to remote work increased cyber vulnerabilities, leading to a rise in cyberattacks. According to Harvard Business Review, 2020 witnessed a significant rise in the frequency of cyber-attacks and ransom payments, with the amount companies paid to hackers rising by 300%.
 

As a result, many organizations sought to bolster their cybersecurity measures and invest in cyber insurance to protect against potential financial losses from breaches. However, the increased frequency and severity of cyber incidents also put pressure on insurance providers, leading some to adjust their coverage terms and premiums to manage the heightened risk. Instances of cyberattacks targeting healthcare institutions and pandemic-related phishing scams further highlighted the importance of cybersecurity insurance in mitigating pandemic-induced cyber risks.
 

Cybersecurity Insurance Market Trends

Insurance companies are continuously innovating and developing new products to meet the evolving needs of businesses. For instance, some insurers are now offering cyber risk management services in addition to traditional insurance policies. These services can help business access their cyber risk, develop and implement security controls, and respond to cyberattacks.
 

Likewise, Parametric cyber insurance pays out based on the occurrence of a specific event, such as a data breach or a denial-of-service attack. This is in contrast to traditional cyber insurance, which pays out based on the actual financial losses incurred by the insurer. These innovations have led to increased competition and expanded offerings in the cybersecurity insurance industry, creating a robust growth outlook for the cybersecurity insurance industry.
 

Cybersecurity Insurance Market Analysis

Based on enterprise size, the market is segmented into large enterprises and SME. The large enterprise segment held a market share of over 61% in 2023. The adoption of cybersecurity insurance by large enterprises is primarily driven by the escalating cyber threat landscape, which includes the rising frequency and sophistication of cyberattacks. Large enterprises face significant financial risks from data breaches, ransomware attacks, and other cyber incidents, making insurance coverage essential to mitigate potential losses. Additionally, regulatory compliance requirements and the need to manage third-party risks further incentivize large enterprises to invest in cybersecurity insurance. The insurance market's innovative offerings and the growing awareness of cyber risks also contribute to driving the adoption of cybersecurity insurance among large enterprises.
 

Based on end use, the market is segmented into BFSI, IT & telecom, healthcare, manufacturing, retail, and others. The BFSI segment held a market share of 26% in 2023. Cybersecurity insurance is becoming increasingly popular across the Banking, Financial Services, and Insurance (BFSI) sector due to the sector's high-value transactions and sensitive customer data. The BFSI industry is a prime target for cybercriminals seeking financial gain or data theft. Instances of major cyber incidents, such as the Equifax data breach in 2017, demonstrated the potential financial losses and reputational damage that could result from cyberattacks in the sector. As a response to these risks, more BFSI institutions are opting for cybersecurity insurance to mitigate potential losses, protect customer trust, and ensure business continuity in the face of cyber threats.
 

North America cybersecurity insurance market held a market share of over 32% in 2023 and is expected to grow at a notable CAGR from 2024 to 2032. The growth of the market is driven by the region's highly digitalized economy, extensive use of technology, and the increasing frequency of cyberattacks. The prevalence of data breaches, ransomware attacks, and other cyber threats has raised awareness among businesses about the potential financial impacts of such incidents. Instances like the SolarWinds supply chain attack in 2020, which affected numerous government agencies and businesses, underscored the need for robust cybersecurity measures and insurance coverage. As a result, more businesses in North America are seeking cybersecurity insurance to protect against cyber risks and ensure resilience in the face of evolving threats.
 

Cybersecurity Insurance Market Share

Major players operating in the cybersecurity insurance industry are:

• American International Group Inc.
• Aon PLC
• Axis Capital
• BitSight
• Corporation
• Liberty Mutual
• Lockton Companies Inc.
• Munich RE
• The Chubb Corporation
• The Hanover Insurance Inc.
• Zurich Insurance Co. Ltd.

These companies focus on strategic partnerships and product launches to increase their market share and provide insurance cover to a wide range of organizations.

Cybersecurity Insurance Industry News

• In April 2023, Chubb announced that it would be expanding its cyber insurance coverage to include ransomware attacks. This expansion is in response to the growing number of ransomware attacks that have been targeting businesses in recent years.
   

The cybersecurity insurance market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments:

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Market, By Component

• Solution
• Service

Market, By Enterprise Size

• Large enterprise
• SME

Market, By Insurance Type

• Packaged
• Standalone

Market, By Coverage Type

• First-party
• Liability coverage

Market, By End Use

• IT & telecom
• BFSI
• Manufacturing
• Healthcare
• Retail
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ 
• Latin America
  • Brazil
  • Mexico 
• MEA
  • South Africa
  • UAE
  • Saudi Arabia