The global cyber insurance market is projected to be worth $90.6bn by 2033, at a growth rate of 22.3% CAGR from 2023, according to an analysis by Market.Us.
The industry is expected to reach $14.8bn by the end of 2024, a significant rise from a projected valuation of $12.1bn in 2023.
The report highlighted the factors that will contribute to an increasing number of businesses seeking cyber insurance coverage over the next 10 years.
- Rising cyber threats and attacks
- Evolving regulatory environment
- Increasing financial impact of cyber incidents
- Growing awareness and understanding of cyber risks
Cyber Insurance Trends in 2023
Standalone cyber insurance policies captured more than two-thirds (68%) of the market in 2023, according to the analysis.
These policies are tailored to specific cyber-threats facing businesses, including data breaches and ransomware. Standalone policies are particularly favored by large organizations and industries highly susceptible to cyber threats such as finance and healthcare.
Third-party coverage was also dominant in the cyber insurance market last year, with a 62.1% share.
These policies cover liabilities and legal costs arising from breaches affecting customers and other parties’ data.
Businesses that handle sensitive customer data are increasingly investing in third-party coverage, driven by the growth of data protection regulations that bring about the risk of lawsuits and fines.
Large business coverage made up nearly three-quarters (72.4%) of the value of the cyber insurance market in 2023.
This is primarily because large enterprises, which often operate globally, have a vast and complex digital infrastructure, putting them at particularly high risk of damaging cyber incidents.
The vertical that made up the biggest market share was banking, financial services and insurance (BFSI), at 28.3%.
This is likely due to the sensitive financial information handled by these industries, making them big targets for cybercriminals. Such businesses tend to invest heavily in cyber insurance policies to mitigate the financial and reputational risks associated with incidents like data breaches and online fraud.
North America held the largest cyber insurance market share by regions, at 37.6% ($4.5bn). This dominance can be attributed to the region’s advanced technological infrastructure, the presence of major global corporations and heightened awareness of cyber threats.
Opportunities for Cyber Insurers to Improve
The report set out several ways cyber insurers can enhance their value to businesses in the face of rising cyber-threats:
- Tailor policies for specific industries, such as healthcare, finance or manufacturing, to address their unique risks and compliance requirements
- Provide holistic risk management services to help organizations proactively manage cyber risks. These include cybersecurity assessments, incident response planning and employee training
- Partner with cybersecurity firms to integrate capabilities like risks assessment services, threat intelligence and incident response capabilities