Northbrook, IL 60062 -- (SBWIRE) -- 08/08/2023 -- The global Cybersecurity Insurance Market size is projected to grow from USD 14.4 billion in 2023 to USD 33.4 billion by 2028, at a CAGR of 18.3% during the forecast period, according to research report by MarketsandMarkets™.

The rise in cyber threats, such as data breaches, ransomware, and phishing attacks, has driven the demand for cybersecurity insurance as organizations seek financial protection against potential losses.

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Based on insurance type, the standalone segment holds the largest market and highest CAGR during the forecast period.

The demand for dedicated cybersecurity insurance policies and the need to mitigate the risks associated with "silent cyber" have led to the increasing popularity of standalone cybersecurity insurance policies. These standalone policies are projected to surpass packaged cybersecurity insurance policies regarding market growth. Organizations are increasingly concerned about cyber risks and seek specialized coverage solely for cyber risk protection, driving the demand for standalone cyber policies. Insurance providers such as AIG, Lloyd's, and Allianz are embracing affirmative cyber and witnessing the growth of standalone policies. These policies are designed to address more complex cyber risks compared to packaged cybersecurity insurance. For example, AIG offers its clients a comprehensive cybersecurity insurance package that includes traditional property and casualty policies and a standalone CyberEdge policy. The CyberEdge policy provides policyholders with a broader range of security protection than the packaged endorsement. Key players in the market offering standalone cybersecurity insurance solutions include AXA XL, AIG, Travelers Insurance, Beazley, Zurich, Fairfax, Tokio Marine, Liberty Mutual, and CNA.

Based on insurance provider end users, healthcare & life sciences is projected to register the highest CAGR during the forecast period.

The healthcare industry faces various challenges, including regulatory fluctuations and the ever-evolving landscape of cyberattacks and breaches. Compliance with privacy and data security regulations such as HIPAA and HITECH necessitate the reliance of healthcare organizations on cybersecurity insurance policies to cover penalty fees. The COVID-19 pandemic has exacerbated cyber threats, with healthcare organizations experiencing increased attacks like ransomware and misinformation campaigns. Cybersecurity insurance is a crucial safeguard for healthcare providers, offering financial protection against cybercrimes, ransomware, data breaches, and other cybersecurity incidents.

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Based on region, Asia Pacific is projected to register the highest CAGR during the forecast period.

Asia Pacific, an emerging economy, is projected to achieve the highest CAGR in the cybersecurity insurance market during the forecast period. Countries in the Asia Pacific region, such as China, Japan, ANZ, and Singapore, are highly concerned about rising security spending due to increasing cyber threats. With its strong government regulations and technological advancements, Asia Pacific presents promising growth opportunities for the cybersecurity insurance market. Insecure interfaces, data breaches, and data losses are top cybersecurity risks in the region, fueled by rapid connectivity and digital transformation. Asia Pacific faces an 80% higher risk of cyberattacks than other regions. Increasing regulatory measures are expected to drive the demand for cybersecurity insurance. Zurich Insurance predicts significant market growth in APAC, with leading players like AIG, Allianz, Chubb, and Zurich operating in the region.

Market Players

The major vendors covered in the cybersecurity insurance market include BitSight (US), Prevalent (US), RedSeal (US), SecurityScorecard (US), Cyber Indemnity Solutions (Australia), Cisco (US), UpGuard (US), Microsoft (US), Check Point (US), AttackIQ (US), SentinelOne (US), Broadcom (US), Accenture (Ireland), Cylance (US), FireEye (US), CyberArk (US), CYE (Israel), SecurIT360 (US), and Founder Shield (US). The insurance vendors covered in the cybersecurity insurance market are Allianz (Germany), AIG (US), Aon (UK), Arthur J. Gallagher & Co (US), Travelers Insurance (US), AXA XL (US), AXIS Capital (Bermuda), Beazley (UK), Chubb (Switzerland), CNA Financial (US), Fairfax Financial (Canada), Liberty Mutual (US), Lloyd's of London (UK), Lockton (US), Munich Re Group (Germany), and Sompo International (Bermuda). The startup vendors covered in the cybersecurity insurance market are At-Bay (US), Cybernance (US), CyberCube (US), Coalition (US), Arceo.ai (US), Kovrr (Israel), Sayata Labs (Israel), Zeguro (US), RiskSense (US), SafeBreach (US), and Cronus Cyber Technologies (Israel).

Key Dynamic Factors For Cybersecurity Insurance Market:

The Cybersecurity Insurance Market was experiencing significant growth and evolution driven by several dynamic factors. Here are some of the key dynamic factors that were influencing the Cybersecurity Insurance Market:

Cybersecurity insurance is in more demand due to the increase in cyberattacks, data breaches, and ransomware events. Organisations are looking for insurance coverage as cyber threats continue to develop and become more sophisticated in order to reduce potential financial losses and reputational harm brought on by cyber catastrophes.

Strict Data Protection Regulations: With the introduction and enforcement of data protection laws like the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR) of the European Union, businesses are now held more accountable for protecting customer data. Organisations can manage compliance risks and financial obligations associated with data breaches with the help of cybersecurity insurance.

High Cost of Cyber Incidents: Due to business interruption, data recovery, forensic investigations, legal costs, and regulatory fines, cyberattacks can cause large financial losses. In the case of a cyber crisis, cybersecurity insurance offers organisations a financial safety net.

Changing Insurance Offerings: To meet the changing needs of organisations, the cybersecurity insurance industry has been undergoing constant change. Insurance companies have started modifying their policies to cover new risks like supply chain vulnerabilities, social engineering fraud, and cyber extortion.

Industry-specific Risk Profiles: The level of cyber risk varies across several industries. Insurance companies specifically design their products to address the cybersecurity concerns faced by industries like healthcare, finance, retail, and critical infrastructure.

Organisational Cybersecurity Maturity: When assessing coverage and rates, insurance underwriters take an organization's cybersecurity posture and risk management procedures into account. Strong cybersecurity practises may qualify an organisation for more extensive and affordable insurance coverage.

Actuarial Difficulties: It is difficult to assess the possible losses and hazards connected with cyber accidents. The inability to appropriately price cybersecurity insurance coverage and the continuously changing nature of cyber risks pose difficulties for insurers.

The state of global cybersecurity Because of how interconnected the world economy is, cyber events can have a significant impact. As a result, insurers must take into account the global nature of cyber risks and exposures.

Support for Reinsurance: Some insurers use reinsurance to address the substantial and intricate risks connected with cybersecurity insurance. The entire capacity and pricing in the cybersecurity insurance market may be impacted by the cost and availability of reinsurance.

Cybersecurity Awareness and Education: As firms become more aware of cyber hazards, the usefulness of cybersecurity insurance as part of an all-encompassing risk management plan is increasingly recognised.

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Competitive and Segmentation Analysis:

The market for cybersecurity insurance is quite competitive, with several reputable insurance providers and specialised cybersecurity insurers competing for customers. AIG, Chubb Limited, Zurich Insurance Group, Allianz SE, Berkshire Hathaway, Hiscox Ltd., AXA, Beazley Group, Travellers Companies Inc., and Munich Re are significant players in the market. These businesses provide a variety of cybersecurity insurance solutions to meet the needs of various customers and the risk profiles of various industries.

The market is divided into segments depending on the kind of coverage, business size, industry sector, geographical location, and policy limit/premiums. First-party coverage, which guards against direct losses sustained by the insured organisation as a result of cyber incidents, and third-party coverage, which covers liabilities and legal costs as a result of cyber incidents, are two examples of coverage kinds.

Small and medium-sized businesses (SMEs) seek specialised insurance coverage catered to their particular cybersecurity needs, while bigger businesses choose comprehensive cyber insurance packages to cover a wider variety of potential hazards.

Industry verticals with particular cyber risk profiles, such healthcare, finance and banking, retail, and critical infrastructure, need for specialised insurance products. Healthcare organisations, for example, are excellent candidates for cybersecurity insurance since they handle sensitive patient data and are subject to special data protection rules.

Due to its high rate of technological adoption and legal emphasis on data protection, North America (which includes the United States and Canada) is a prominent market. Geographical areas also play a crucial role in segmentation. With its stringent data protection laws, such as GDPR, Europe has seen a spike in demand for cybersecurity insurance. Due to enterprises' growing recognition of the significance of cyber risk management, the Asia-Pacific area has also seen a significant increase in cybersecurity insurance.

Finally, the size of the business, the industry, cybersecurity measures, and the claims history all affect policy limits and premiums. These elements have an impact on the cost and range of coverage that are provided to specific organisations.

Overall, the market for cybersecurity insurance is still active, and insurers are constantly improving their products to accommodate new cyber threats and the particular requirements of different types of companies and industries. In an increasingly digital and connected world, businesses all over the world are seeing the importance of cybersecurity insurance as a key part of their risk management strategy.

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