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Cyber Insurance Market Size, Share & COVID-19 Impact Analysis, By Component (Solution and Services), By Insurance Type (Standalone and Tailored), By Coverage Type (First-Party, Liability Coverage) By Enterprise Size (SMEs, Large Enterprise), By End User (Healthcare, Retail, BFSI, IT & Telecom, Manufacturing and Others), and Regional Forecast, 2021-2028

Region : Global | Format: PDF | Report ID: FBI106287

 

KEY MARKET INSIGHTS

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The global cyber insurance market size was USD 6.15 billion in 2020. The market is projected to grow from USD 7.60 billion in 2021 to USD 36.85 billion in 2028 at a CAGR of 25.3% in the 2021-2028 period. The solutions considered in the scope includes Chubb Tailored Solutions, Aon Cyber Insurance, Munich Re Cyber Solutions, Hiscox Cyber Liability Insurance, AIG CyberEdge and more. The global impact of COVID-19 has been unprecedented and staggering, with cyber insurance witnessing a significant impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant growth of 22.4% in 2020 compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.


Cyber insurance covers businesses’ cyber liabilities post-attack that includes fine charges, compliances, hardware and software repairs, third-party compensation, among others. The increasing cybersecurity risk and data breaches is driving businesses in implementing insurance policies. Also, various countries are imposing fines and regulatory rules on the company for any data breach. Small and medium industries are also being targeted for cyberattack, this fuels the demand for new insurance products for small businesses. For instance, in March 2021, Aviva plc. designed new insurance products dedicated for small businesses to handle the cyberattacks.


COVID-19 Impact


Remote Working Amid COVID-19 to Push Insurance Demand


The pandemic has severely affected the businesses across the globe. To maintain social distancing and to follow lockdown protocols various businesses adopted work from home policy during pandemic. Remote location increased the risk of cyberattack as workers were connected through unprotected network and also used personal devices. This surged the cybercrime amid pandemic year. Thus, the adoption of virtual workspaces owing to COVID-19 crisis propel the demand for insurance witness significant growth.


As per the Insurance Regulatory and Development Authority of India, the transition to virtual workplace due to COVID-19 is further expected to continue post-pandemic. Thus, post-pandemic, the demand for insurance in cybersecurity industry is likely to gain traction. As per the estimations of Moody's Investor Services, the premiums paid in the year 2020 against ransomware attacks and cyber fraud has increased by USD 1.6 billion. It also stated that the increase in ransomware attacks amid pandemic is one of the major factor to boost this market post-pandemic.


LATEST TRENDS


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Integration of Blockchain and Artificial Intelligence (AI) with Insurance Solution to Boost Market Growth


The Blockchain technology provides transparency, cost-saving, efficiency gain, faster results, and fraud mitigation in real-time frame. Similarly, artificial intelligence increases the insurance broker’s and underwriter’s efficiency and helps with accurate prediction of risky attacks. The integration of Blockchain and AI with the cyber insurance is expected to expand the efficacy of the coverage. The technologies can offer tailored coverage with accurate threat analysis and helps in improving customer experience. The technology can predict the possible fluctuations in the regulatory policies and help the insurer with efficient coverage. Similarly, with Blockchain, the insurer assesses the risk management. Further, it supports in reinsurance practices, know-your-customer, claims handling, distribution methods and more.


Thus, the integration of AI and Blockchain technologies with insurance is expected to offer improved risk profiling, reduced fraud loss, automated compliance, automated claim submission and more. This is likely to boost the market growth.


DRIVING FACTORS


Increasing Cyberattacks and Data Breaches to Drive Market Growth


The cybercrime and data breaches are increasing across the globe. As per the Checkpoint report, the year 2020 witnessed 93% increase in ransomware attacks, and that 6 out of 10 companies suffered the attack. This significant rise in cyberattacks is expected to fuel the cyber insurance market growth.


Industries such as BFSI, healthcare and retail are being highly targeted by the hackers owing to the extensive amount of stored customers data. Also, the growing digitalization, mobile banking, online shopping, online payment, electronic medical records is expected to fuel the risk of data breaches in these industries. For instance, as per the reports by HIPAA Journal, 29.1% of month-on-month data breaches were recorded in the year 2020. Thus, to measure and secure the loss, companies across industries are steadily investing in insuring the data. This insurance offers wide coverage to the companies and helps in minimizing the post-cyberattack impact. Thus, increasing cybercrime is set to propel various cyber insurance policy demand.


RESTRAINING FACTORS


High Premium Cost to Hamper Market Growth


With the increasing data breaches incident, the demand for insurance is growing, however the high cost of insurance policy is expected to hinder the market growth. The insurance companies are increasing their premium cost and it is hampering the continuation of the insurance policy. The premium rates are raised by 30% and the companies such as American International Group Inc. are reducing coverage limit as the cost soar. Thus, small and medium businesses with limited funds are hesitating in further investing in security insurance. This high cyber insurance cost is expected to hamper the market growth.


SEGMENTATION


By Component Analysis


Higher Capability to Measure Cyber Risk to Drive Insurance Solutions Demand


Based on the study, the component is bifurcated into solution and services.


The solution sub-segment is expected to gain maximum cyber insurance market share and is likely to witness rapid growth during the forecast period. Some of the key insurance solution in the market are Axis Cyber Insurance, Berkshire Hathaway Specialty Insurance, AXA XL Cyber Liability Insurance and more. The insurance solutions cater to the issues such as payment card loss, business interruption, telephone toll fraud, digital data recovery, e-theft, network extortion, among others. The demand for insurance solution is gaining traction as it helps in measuring and reducing the cyber risk.


Services are estimated to showcase significant growth during the forecast period. Some of the prominent services include Zurich Cyber Security Services, Aon Cyber Risk Professional Service, Munich Re Cyber Risk Services and more. The increasing adoption of technologies such as Blockchain and Internet of Things (IoT) is estimated to boost the service demand. Also, the demand for post-incident services are expected to drive the market growth.


By Insurance Type Analysis


Maximum Coverage Through Standalone Insurance Type to Boost Market Growth


The insurance type is categorized into standalone and tailored.


Standalone is probable to gain maximum segment share during the forecast period. Its extensive cover policy is likely to fuel the demand for standalone insurance. As per the Swiss Re personal cyber security insurance report, the standalone insurance type is expected to grow double-digit in the coming years.


Tailored insurance type is anticipated to gain maximum demand during the forecast period as it suits the persons or company’s requirement. The tailored insurance is gaining higher demand to cater to specific needs including possible industry risk, coverage, cost-effectiveness and more for industries such as healthcare, BFSI, IT and telecom among others.  


By Coverage Type Analysis


Increasing Cyber Crime to Surge First-part Coverage Demand


The coverage type is categorized into first-party and liability coverage.


First-party insurance covers the victims those are directly involved in the incident. The increasing extortion, hacking activities, data destruction, online theft, and more is likely to fuel first-party coverage type.


Third-party sub-segment is projected to gain rapid growth during the forecast period. The demand for third-party is growing as it covers insurer’s obligation to compensate its affected clients and partners. It covers damages such as privacy lawsuit, fine for compliances, claims and settlements among others. Thus, the companies dealing with clients’ personal and confidential data are significantly adopting third-party coverage.


By Enterprise Size Analysis


Growing Cyber Vulnerability to Boost SMEs Insurance Investment


The enterprise size is categorized into large enterprises and small and medium enterprises (SMEs).


Large enterprises are expected to dominate the segment owing to increasing cyberattacks and massive data breach incidents. The large enterprises are extensively investing in risk management solution to ensure client and companies data safety.


Small and medium enterprises are expected to witness rapid CAGR during the forecast period. The SMEs are the new target of the hackers, and thus, small businesses are keen on investing in cybersecurity insurance solutions. Many key players are offering insurance products focused on small and medium businesses. For instance, in November 2020, Aon introduced digital insurance for small businesses to help manage the insurance coverage through the platform.


By End User Analysis


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Need to Protect Crucial Customer Data to Fuel Insurance Demand of BFSI


The end user is categorized into healthcare, retail, BFSI, IT & telecom, manufacturing and others.


BFSI is likely to gain maximum segment share during the forecast period. The rapid digitalization, increasing customer confidential data, adoption of mobile application and internet banking is expected to surge the cybersecurity risk. The financial sector is likely to be attractive target for the hackers owing to the vast customer data. This is likely to drive the demand for cybersecurity insurance in BFSI. Similarly, retail sector to gain prominent market share during the forecast period. The adoption of insurance policy is helping retailers in gaining customers trust and expand the business.


Healthcare to witness rapid growth owing to increasing cyberattacks on patients’ data. As per the Healthcare Breach Report, in 2020, the U.S. healthcare breaches increased by 55.1%. Similarly, as per FBI’s Cyber Division, one stolen healthcare record can be sold 50-time higher rate. This is likely to boost the demand for insurance in healthcare sector.


REGIONAL INSIGHTS


North America Cyber Insurance Market Size, 2020 (USD billion)

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The global market scope is classified across five regions namely North America, Europe, Asia Pacific, Middle East, and Africa, and South America.


North America to dominate the market share during the forecast period. The increasing cyberattacks and high risk of data loss is likely to drive the cybersecurity insurance demand in the region. U.S. is likely to witness rapid growth owing to the country’s strong government regulation and strict policy in insuring cybersecurity. Also, the significant presence of key cyber insurance companies in the country is likely to fuel its growth.


Asia Pacific is estimated to witness rapid growth during the forecast period owing to the increasing cyber risk in the region as compared to the North America and Europe. As per the Microsoft 2020 report, APAC witnessed 1.7 times higher ransomware attacks as compared to the rest of the world. To increase the ease of doing business with lesser cyber security risk, government in countries such as India, China, South Korea, Japan, and others are investing in insurance. As per the Cyber Risk Management report, insurance demand in Asia Pacific for cybersecurity increased by 87%.


Europe is likely to gain significant share of market during the forecast period. The changing insurance regulatory rules such as imposing fine on companies that suffered data breach is likely to drive cyber insurance premiums. Various insurance brokers and insurance companies are expanding across European countries. For instance, in October 2020, the Chubb Corporation launched Personal Insurance product and services in the U.K. to offer personal and family protection.


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South America is likely to gain steady growth during the forecast period. Brazil to gain strong growth, according to the Fitch Ratings report, underwrite cyber coverage witness steady momentum in 2020 and 2021. Similarly, the Middle East and Africa is likely to showcase significant growth as the risk of cyberattack and data loss increases.


KEY INDUSTRY PLAYERS


Innovative Insurance Product to Boost Market Presence of Key Players


The key market players are offering dedicated solutions for the small and large businesses. These players are investing in new product launch to expand its customer base and the global presence. Through partnership and collaboration, the players are offering enhanced cyber coverage for personal and business protection. The dominant players are also significantly acquiring enterprises to gain new customer, expertise and global recognition.


March 2021 – Axis Capital announced partnership with Elpha Secure, to offer cyber security insurance and software protection dedicated for the small businesses. Through this partnership, companies are bringing new innovative solutions for the micro-size business and small enterprises.


September 2021 – Munich Re Group’s HSB introduced cybersecurity insurance and services new collection designs for small business in Canada. The company aims to provide comprehensive protection of increasing cyber risk for small businesses.


List of the Key Companies Profiled:



  • American International Group Inc.​ (New York, U.S.)

  • Munich Re Group (Munich, ‎Germany)

  • Zurich Insurance Co. Ltd (Zurich, Switzerland)

  • Berkshire Hathaway (Nebraska, U.S.)

  • XL Group Ltd (AXA S.A) (Hamilton, U.S.)

  • The Chubb Corporation​ (New Jersey, U.S.)

  • Aon Plc. (London, U.K.)

  • Axis Capital (Pembroke Parish, Bermuda)

  • Lockton Companies Inc.​ (Missouri, U.S.)

  • Hiscox Inc. (Georgia, U.S.)


KEY INDUSTRY DEVELOPMENTS:



  • September 2021 – Zurich Insurance Group collaborated with BOXX Insurance, a Toronto-based insur-tech firm. The company, through collaborating with BOXX, aims to strengthen its customer-focused solution of cyber protection for its customers and partners.

  • February 2021 – The Chubb Corporation launched insurance products for digital consumers under its BLINK suit. The BLINK products are personal cyber protection and are available in 25 States.


REPORT COVERAGE


An Infographic Representation of Cyber Insurance Market

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The market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry and cyber insurance market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.


REPORT SCOPE & SEGMENTATION






























































  ATTRIBUTE 



  DETAILS



Study Period



2017-2028



Base Year



2020



Estimated Year



  2021



Forecast Period



2021-2028



Historical Period



2017-2019



Unit



Value (USD billion)



Segmentation



Component, Insurance Type, Coverage Type, Enterprise Size, End User, and Geography



By Component




  • Solution

  • Services



By Insurance Type




  • Standalone

  • Tailored



By Coverage Type




  • First-Party

  • Liability Coverage



By Enterprise Size




  • SMEs

  • Large Enterprise



By End User




  • Healthcare

  • Retail

  • BFSI

  • IT & telecom

  • Manufacturing

  • Others (Government, Travel & Tourism and others.)



By Region




  • North America (By Component, By Insurance Type, By Coverage Type, By Enterprise Size, By End User and By Country)





    • U.S. (By End User)

    • Canada (By End User)

    • Mexico (By End User)





  • South America (By Component, By Insurance Type, By Coverage Type, By Enterprise Size, By End User and By Country)





    • Brazil (By End User)

    • Argentina (By End User)

    • Rest of South America





  • Europe (By Component, By Insurance Type, By Coverage Type, By Enterprise Size, By End User and By Country)





    • U.K. (By End User)

    • Germany (By End User)

    • France (By End User)

    • Italy (By End User)

    • Spain (By End User)

    • Russia (By End User)

    • Benelux (By End User)

    • Nordics (By End User)

    • Rest of Europe





  • Middle East & Africa (By Component, By Insurance Type, By Coverage Type, By Enterprise Size, By End User and By Country)





    • Turkey (By End User)

    • Israel (By End User)

    • GCC (By End User)

    • North Africa (By End User)

    • South Africa (By End User)

    • Rest of the Middle East & Africa





  • Asia Pacific (By Component, By Insurance Type, By Coverage Type, By Enterprise Size, By End User and By Country)




    • China (By End User)

    • Japan (By End User)

    • India (By End User)

    • South Korea (By End User)

    • ASEAN (By End User)

    • Oceania (By End User)

    • Rest of Asia Pacific




Frequently Asked Questions

The market is projected to reach USD 36.85 billion by 2028.

In 2020, the market size stood at USD 6.15 billion.

The market is projected to grow at a CAGR of 25.3% during the forecast period.

Standalone is likely to lead the market development.

Increasing cyberattacks and data breaches to drive market growth

American International Group Inc., Munich Re Group, Zurich Insurance Co. Ltd., Berkshire Hathaway, XL Group Ltd (AXA S.A), The Chubb Corporation, Aon Plc. among others are the top players in the market.

North America region is expected to hold the highest market share.

Asia Pacific is expected to grow with the remarkable CAGR.

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