Cyber Insurance Market - Forecasts from 2022 to 2027

The cyber insurance market has a CAGR of 16.40% during the forecast period to reach US$20.432 billion by 2027, from US$7.056 billion in 2020.



Cyber insurance (also known as cyber risk or cyber liability insurance) is a type of coverage designed to safeguard one's company from cyber-security threats including security breaches and ransomware attacks. A company is responsible for its cyber security, but obtaining the correct insurance will ensure that they are not alone in the occurrence of a cyber assault. Cyber liability insurance will give critical assistance in keeping the company viable.

Market Trend:

Following the COVID-19 pandemic, enterprises saw a rise in the cases of cyber-attacks and data breaches. This led to an increase in the demand for cyber insurance companies since organizations have started to understand the importance of data security. To adopt a proper cyber insurance policy, it is important to strategize the goals and functions of the policy the organization will be adopting. The US currently occupies a major segment of the cyber insurance market.

Growth Factors

Increase in cyber attacks

With the growing adoption of cloud-based technology among companies, cyber-crime cases have increased significantly. Data breach cases have also increased consequently in the last few years. According to IBM, the average overall cost of a data breach increased from US$3.86 million to US$4.24 million, the highest combined cost in the report's history. In breaches where remote work was a factor in triggering the breach, the average cost was US$1.07 million greater than in breaches where remote work was not a factor. IBM also reported that the average cost of a ransomware assault is reported to be US$4.62 million, which is more than the average cost of a data breach (US$4.24 million). The IC3 reported in March 2022 that it received over 20,000 Business Email Compromise (BEC) complaints last year, with estimated adjusted losses amounting to US$ 2.4 billion. According to the FBI, Business Email Compromise (BEC) breaches have already resulted in global losses of at least $26 billion since 2016. The cyber insurance industry is anticipated to expand significantly in response to the increasing number of cybercrimes.

Healthcare to become a major player

The healthcare sector has been facing constant strain since the start of the pandemic. Healthcare workers find it difficult to cope with the increasing number of cases. According to IBM, the average overall cost of a healthcare data breach grew by 29.5 percent from $7.13 million in 2020 to $9.23 million in 2021. IBM also found that the United States had the most expensive data breaches at $9.05 million per incident, with the Middle East next at $6.93 million and Canada at $5.4 million.

At the time of publishing, the Office for Civil Rights (OCR) had identified approximately 550 covered companies that had a data breach in 2021. As a result of these breaches, almost 40 million people's Protected Health Information (PHI) was exposed. According to Health News Florida, a breach on the Florida KidCare health plan's website revealed the personal information of about 3.5 million people who registered for coverage or were enrolled in the plan between 2013 and 2020. Medicaid, MediKids, Florida Healthy Kids, and the Children's Medical Services program are all part of Florida KidCare.

Another instance of a healthcare data breach was reported on May 2021 in the 20/20 Eye Care Network Inc. The company identified unusual behavior in their Amazon Web Services environment, which delivers eye and ear care services and management. Following an examination, it was discovered that material, maybe including personal information, had been erased. Following the breach, the company faced a lawsuit. Such instances signify the importance of cyber security and how cyber insurance can help safeguard the data from these organizations. Hence, cyber insurance is expected to see a rise in the healthcare sector.

Restrain

Lack of focus on SMEs

With the increasing cost of cyber insurance services, small and medium enterprises find it difficult to cope with the market. This has left SMEs vulnerable to cyber attacks and breaches, which has resulted in them being easy prey for cyber attackers. According to a survey by Digital.com, 51% of small businesses do not have the necessary measures to safeguard their resources in case of a cyber attack. 19% of the surveyed businesses have reported that the cyber insurance measures were too expensive for small businesses. Moreover, most major corporations have the financial resources to address the problem if it arises. Tiny enterprises, on the other hand, lack the financial capacity to pay such a large expenditure, which means that a cybersecurity assault may shut down a small company forever. Further, the survey revealed that over a third of respondents are unconcerned about their online security, believing that their company is "too little" to be a target. Factors like these are expected to decrease the market growth of the cyber insurance market.

Market Segmentation:

By Enterprise Type

• Small
• Medium
• Large

By End-User Industry

• BFSI
• Healthcare
• Telecommunications
• Retail

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Europe
• Germany
• France
• United Kingdom
• Spain
• Middle East and Africa
• Saudi Arabia
• Israel
• South Africa
• Asia Pacific
• China
• Japan
• South Korea
• India
• Others