Cyber risks are becoming more prevalent and disruptive, with an increased number of incidents involving data breaches, phishing scams, malware attacks, ransomware threats, and identity theft. Cyber insurance helps protect businesses against losses resulting from cyber-attacks or data breaches. Cyber insurance coverage can include data loss and restoration, extortion, legal fees, and more. Cyber Security Insurance Market insurance increases and improves cyber security with the benefits of good security, and internalizing of the costs of poor security. There are many benefits that coincide with investing in insurance.
The growth of the US cyber insurance market is due to the introduction of legislation in most states to take appropriate security measures to protect against cyber risks and report serious breaches to national authorities. This led to an increase in demand for cyber insurance products covering personal data breach. The U.S. is the largest market for the cyber security insurance market. The U.S. economy loses US$57 billion-US$109 billion per year due to malicious cyber activity, according to the White House Council of Economic Advisers. European market can be expected grow with the rapid rate over the forecast period, owing to new laws about data security and protection, “EU General Data Protection Regulation (GDPR)”
Cyber challenges in Asia Pacific region, such as low cyber security investments and long dwell times, can be attributed to the complex geopolitical tensions, exposed critical infrastructure, and the severe shortage of cyber security talents in the region. Brazil is undergoing a digital revolution with few parallels in the developing world. The rate of digital penetration and social media adoption has risen exponentially over the past decade. Over 50% of Brazilians are active Internet users, & Brazilian financial institutions were early adopters of online services. Cyber security and online fraud are major concerns, with annual losses reaching billions of dollars.
According to a new market report published by BlueWeave Consulting, the global cyber security insurance market was valued at US$ 4,222.3 Mn in 2017 and is expected to expand at a CAGR of 25.3% from 2018 to 2026, reaching US$ 32,543.6 Mn by the end of the forecast period. According to the report, North America was the largest contributor in terms of revenue to the cyber security insurance market in 2017.
The risk management segment is expected to dominate the global cyber insurance market.
The global market for cyber security insurance is segmented on the basis of service type, enterprise size, industry vertical and geography. On the basis of service type, the market is segmented into risk management, integrity, forefront portfolio, third party liability, and others. Risk management is expected to account a 26.8% market share in 2018
Healthcare industry is highly affected by cybercrime
On the basis of industry vertical, the market is divided into banking and financial services, telecom and IT, government, healthcare, education, manufacturing, travel and hospitality and others. Financial services, energy and utilities, and telecommunications are among the most investigated industries in APAC, highlighting the need for higher awareness levels, stronger mitigation measures, and improved cyber security postures
North America accounts for more than 80% of market share in 2018
Geographically, the global cyber security insurance market is bifurcated into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa. The Asia Pacific is the most promising markets for cyber security insurance market and is slated to offer players a host of opportunities in the coming years. In the Indian market, the high demand for cyber insurance policies is due to the telecom revolution. Moreover, increase digitization of the economy further boosts the demand. Latin America is experiencing significantly more data breaches and with that, increased sales of cyber insurance. Norton Security has reported cybercrime cost Brazil roughly US$8 billion and Mexico US$3 billion in 2015. Cyber security insurance coverage is still in its at beginning stage in Latin America.
Major industry players in cyber security insurance market are adopting different strategic initiatives such as mergers and acquisitions, partnerships, and collaborations for technologies and new product development.
In June 2017, Zurich Brasila, subsidiary of Zurich Insurance Group, has launched insurance coverage for cyber-related risks, amid the fast-growing use of internet among companies and individuals. The company will offers protection in nations more exposed to cyber-attacks, such as the US, the UK and China, will now offer this product in Brazil due to increasing demand.
In June 2014, the UK Government launched a joint initiative with some major British insurers to increase the level of IT security in UK companies called the “Cyber Essentials Scheme”, it is based on certificates and will ensure that certified organizations have a certain amount of security measures in place. Cyber Essentials has been developed in close consultation with the insurance industry and is backed by AIG, Marsh, Swiss Re, the British Insurance Brokers’ Association (BIBA) and the International Underwriting Association (IUA).
The global cyber security insurance market includes key players such as XL Group Ltd., American International Group Inc., Zurich Insurance Co. Ltd, AON PLC, Allianz Global Corporate & Specialty, Munich Re Group, Chubb, HSB, BCS financial corporation, Marsh & McLennan Companies, Inc., Markel Corp, Traveler’s group, Hiscox, Beazely Insurance group and others.
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