Cybersecurity Insurance Market

The global Cybersecurity Insurance Market size is projected to grow from USD 11.9 billion in 2022 to $29.2 billion by 2027, at a CAGR of 19.6 during the forecast period. The major factors driving the market include the increasing number of sophisticated cyber-attacks amplifying the fear of financial losses, and growing need for compliance with various upcoming regulations.

The Global Cybersecurity Insurance Market finds that the increase in cyber-attacks and data breaches is expediting the market growth. Primarily driven by the rising rate of recovery of financial losses, the total Global Cybersecurity Insurance Market is estimated to reach $26.24 Billion by the year 2028, as per the Vantage Market Research.

The demand of Cybersecurity Insurance is credited to the high adoption of artificial intelligence and blockchain technology for risk analytics is also anticipated to augment the growth of the Global Cybersecurity Insurance Market. The ongoing Russia and Ukraine War and Cold war among China and Taiwan on gaining the global Leadership position into manufacturing and supplying Chips makes the technology and infrastructure more vulnerable.

As per Globaldata, the digital world is a minefield for insurers at the moment, with giants like AXA, CNA Financial, Tokio Marine and Marsh & McLennan suffering cyberattacks in 2021 alone. Against this backdrop, cybersecurity revenues in the insurance sector are set to grow at a compound annual growth rate of more than 10% from $6.4 billion in 2020 to $10.6 billion in 2025.

The report reveals that insurers must navigate the theme cautiously or risk suffering reputational damage from either a data breach or refusing to make a cyber insurance payout.

The Russia-Ukraine war has increased the likelihood of state-sponsored cyberattacks that target critical infrastructure, military operations, and businesses. Such attacks not only target insurers but lead to expensive payouts and damage the reputation of those reluctant to pay.

Cyber insurance is now far riskier for insurers to provide, with some ransomware gangs reportedly targeting businesses with cyber insurance policies as they are more likely to pay a ransom. It is thus no surprise that the likes of AXA and AIG are rethinking their cyber policies to mitigate the higher risk of a payout through higher premiums and/or reduced customer coverage.

“Simultaneously, fewer SMEs are looking to purchase cyber insurance due to the cost-of-living crisis and rising overheads, making it harder for them to afford the coverage. This issue is only being exacerbated by insurers putting up their cyber insurance prices.”

S Mohini Ratna, Editor, VARINDIA