Global Cyber Insurance Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Enterprise Size (Small, Medium, Large), By End-User Industry (BFSI, Healthcare, Telecommunications, Retail, Others), And By Geography - Forecasts From 2022 To 2027

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

Introduction

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 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 essential 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, cybercrime 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 due 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 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 with 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 in May 2021 in the 20/20 Eye Care Network Inc. The company identified unusual behavior in its 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 rise in the healthcare sector.

Restraint

• Lack of focus on SMEs

With the increasing cost of cyber insurance services, small and medium enterprises find it challenging to cope with the market. This has left SMEs vulnerable to cyberattacks 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 cyberattack. 19% of the surveyed businesses have reported that 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 their company is "too little" to be a target. Factors like these are expected to decrease the market growth of the cyber insurance market.

Key Developments

• May 2022: Two brand-new digital insurance solutions were announced by Embroker: Cyber Insurance and Crime Insurance. They offer two new standalone plans, to help businesses stay protected against new and emerging dangers as part of our commitment to make business insurance radically easy.
• April 2022: Elpha secure, along with Socotra, has introduced a complete cyber insurance coverage that covers business disruption, financial and data losses (including ransomware), and third-party cybercrime litigation.
• December 2021: Together with Accenture and Vodafone Business, Generali has developed a suite of cyber insurance services to assist corporate and SME clients in identifying, responding to, and recovering from cybersecurity risks and events. The effort will help Generali clients improve their capacity to ensure a rapid return to normal operations and to reduce implications for both their own organization and third parties. It includes cyber risk assessments, phishing simulations, and learning programs.

Impact of the COVID-19 on Cyber Insurance Market

Despite the major industrial disruptions and economic decline during the pandemic, the cyber insurance market had a positive impact. Owing to the rapid increase in cyber fraud, hacking and cyber attack cases, the demand for the cyber insurance market increased. The wide array of services and safeguarding techniques offered by cyber insurance companies were utilized by consumers to safeguard their electronic data. Additionally, with the improvements in privacy policies and data security, the market demand is anticipated to increase substantially.