Cyber Security Insurance Market

The global cyber security insurance market size was valued at USD 12.17 Billion in 2022 and is projected to reach USD 55.23 Billion by 2031, expanding at a CAGR of 18.3% during the forecast period, 2023 – 2031. Cyber insurance is intended to assist an organization in the event of a malware security breach or similar case. It typically includes losses resulting from network security breaches, indemnification from data breach-related lawsuits, and loss of privacy, among others.

It provides coverage for first-party and third-party claims in order to reduce risk exposure by offsetting costs associated with the recovery of internet-based cyber losses. Cyber-attacks have a negative impact on businesses, including regulatory fines, decreased customer base, legal penalties, business disruption, and attorney fees, intellectual property loss, and reputational damage. These attacks have become more intense and frequent, organizations, posing a threat to individuals, and countries, driving the adoption of cyber insurance solutions.

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Cyber Security Insurance Market Trends, Drivers, Restraints, and Opportunities

• Technological advancements and increased adoption of AI, IoT, ML, and cloud services are expected to drive the cyber insurance market.

• Theft or unauthorized access to sensitive business data, such as employees' personal information, intellectual property, or even financial records, is on the rise, is driving the cybersecurity insurance market.

• Growing number of sophisticated cyber-attacks, and fear of financial losses, are driving the market.

• The cyber insurance market is driven by an increase in awareness regarding cyber risks among high-level executives.

• High cost of cybersecurity insurance is impeding the market.

• The inclusion of charges for data recovery and negotiation with hackers impede the market.

• AI and blockchain are two recent trending advancements that are expected to enhance risk advanced analytics and create opportunities.

Scope of Cyber Security Insurance Market Report

The report on the cyber security insurance market includes an assessment of the market, size, share, trends, segments, and regional markets. Overview and dynamics have been included in the report.

Cyber Security Insurance Market Segment Insights

Solutions segment is projected to hold a significant market share

Based on components, the cyber security insurance market can be bifurcated into solutions and services. The solutions segment is further classified as disaster recovery & business continuity, cybersecurity insurance analytics platform, and cybersecurity solution. Additionally, cybersecurity solutions segment is divided into cybersecurity resilience and cybersecurity risk & vulnerability assessment.

The services segment is split into security awareness training, consulting/ advisory, and others. The solutions segment is projected to hold a significant share of the market due to health-related data moving rapidly toward electronic records, the healthcare industry around the world is experiencing multiple data breaches. As a result, the number of electronic health/medical records has increased, necessitating the use of strong security solutions. The segment is driven by the rising number of installation of cybersecurity software and the readiness of large and small organizations against online threats.

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Data breach segment is anticipated to account for a substantial share

On the basis of insurance coverage, the market can be bifurcated into data breach and cybersecurity liability. The data breach segment is categorized as ransomware attacks, data loss, denial of service &downtime, others. The cybersecurity liability segment is divided into types and sources/targets. Additionally, this segment is further classified as brand & related intellectual property protection, non-compliance penalty, data protection & privacy costs, and others. The source/target segment is bifurcated into external and internal. The data breach segment is anticipated to account for a substantial share of the market due to new cases of cyber extortion and fund transfer fraud. Reliance on the internet to complete transactions and communicate with employers can pose significant risks, thus driving the cyber threat protection segment.

Stand-alone segment expand at a rapid pace in the coming years

In terms of insurance types, the market can be bifurcated into stand-alone and packaged. The stand-alone segment is expanding at a rapid pace in the coming years. Credit monitoring costs, cyber extortion costs, forensic consultants costs, data restoration costs, public relations costs, notification costs, and legal representation expenses are included in the stand-alone insurance, which in turn is driving the segment.

Large enterprises register a high CAGR during the forecast period

Based on organization sizes, the market can be segmented into large enterprises and SMEs. The large enterprises segment is likely to expand at a high CAGR during the forecast period, as they use a huge number of cloud and Internet of Things (IoT)-based software that is highly vulnerable to cyber attacks, large enterprises have adopted cybersecurity insurance solutions. Large enterprises are increasingly adopting cybersecurity insurance solutions, and are expected to invest heavily in advanced cybersecurity insurance solutions to provide optimal security in their enterprises' intense competitive environment. Furthermore, stringent regulatory pressure is increasing cyber risk awareness, as is the need for cybersecurity insurance solutions.

IT & ITES segment expand at a substantial growth rate in the coming years

On the basis of end-users, the cyber security insurance market can be fragmented into technology providers and insurance providers. The technology providers segment is classified as third-party administrators, brokers, & consultancies, government agencies, and insurance companies. The insurance providers segment is categorized as healthcare & life science, IT & ITES, financial services, telecom, travel, tourism, & hospitality, retail & e-commerce, and others. The IT & ITES segment is projected to expand at a substantial pace in the coming years, thus  in-house teams' companies are taking efforts to strengthen their defenses against cyber-attacks. The reliance on connectivity technologies and servers to meet client the demands is projected to fuel the segment. High spending of multinational corporations, and the shift to remote work, result in massive sales of cybersecurity software.

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North America is expected to dominate the market

In terms of regions, the market can be classified as Asia Pacific, North America, Europe, Latin America, and Middle East & Africa. North America is expected to dominate the market due to the presence of large multinational corporations in a variety of industries. North America has stable and well-established economies, allowing it to invest heavily in R&D activities, thereby contributing to the development of new technologies in the cybersecurity insurance market. The US is responsible for the most revenue in the region due to the need for monitoring and investigating cyber threats. The presence of the majority of key players in the cybersecurity insurance market is expected to be a major driver of market in region.

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Segments

By Components

• Solutions
  • Disaster Recovery and Business Continuity
  • Cybersecurity Insurance Analytics Platform
  • Cybersecurity Solution
    • Cybersecurity Resilience
    • Cybersecurity Risk & Vulnerability Assessment
• Services
  • Security Awareness Training
  • Consulting/Advisory
  • Others

By Insurance Coverage

• Data Breach
  • Ransomware Attacks
  • Data Loss
  • Denial of service & Down-time
  • Others
• Cybersecurity Liability
  • Type
    • Brand & Related Intellectual Property Protection
    • Non-compliance Penalty
    • Data Protection & Privacy Costs
    • Others
• Source/ Target
  • External
  • Internal

By Insurance Types

• Stand-alone
• Packaged

By Organization Sizes

• Large Enterprises
• SMEs

By End-users

• Technology Provider
  • Third-party Administrators, Brokers, & Consultancies
  • Government Agencies
  • Insurance Companies
• Insurance Provider
  • Healthcare & Life Science
  • IT & ITES
  • Financial Services
  • Telecom
  • Travel, Tourism, & Hospitality
  • Retail & E-commerce
  • Others

By Key Players

• Allianz
• Aon plc
• American International Group, Inc.
• Berkshire HathwayInc
• AXA
• Lockton Companies, Inc
• Lloyd’s of London Ltd
• The Chubb Corporation
• Munich Re
• Zurich

Competitive Landscape

Key players in the cyber security insurance market are Allianz; Aon plc; American International Group, Inc., Berkshire HathwayInc; AXA; Lockton Companies, Inc; Lloyd’s of London Ltd; The Chubb Corporation; Munich Re; and Zurich. These players have constantly engaged in several market development activities including collaborations, agreements, mergers & acquisitions, production capacity expansion, product launches, and partnerships to increase their market share.