The global sales of cybersecurity insurance is projected to be worth USD 16,100.6 million in 2024 and expected to reach a value of USD 85,707.2 million by 2034. Sales are estimated to rise at a CAGR of 18.2% over the forecast period between 2024 and 2034. The income created by cybersecurity insurance in 2023 was USD 13,621.5 million. The industry is projected to register a Y-o-Y growth of 18.0% in 2024.
Cybersecurity insurance solution and services protects companies from financial losses instigated by cyberattacks and data breaches. Most industries now see the need for this insurance because cyberattacks are happening more often and getting complex to handle. It contains incidents that disturb operations and result in financial loss. These includes ransomware attacks, data breaches, and network security breakdowns, creating positive outlook for cybersecurity insurance market.
The main advantage of insurance for cybersecurity is financial security. Costs associated with cyberattacks can be high and include credit monitoring services, legal fees, & public relations efforts. Moreover, businesses may have to pay for network maintenance, data retrieval, and third party compensation. By helping to pay for cyberattack-related expenses, cybersecurity insurance keeps a company from going bankrupt from a single incident.
Moreover, cybersecurity insurance can progress a business's entire tactic to risk management. In order to be eligible for coverage, insurance firms demand that businesses implement specific cybersecurity best practices. This may result in tighter security protocols and frequent security audits.
Employees may be trained on cybersecurity awareness. More stringent policies for data protection could also be put in effect. As a result, businesses lower their risk of future intrusions and strengthen their overall cybersecurity posture in addition to receiving financial protection. This protecting initiatives are driving the growth of the cybersecurity insurance market.
Global Cybersecurity Insurance Industry Assessment
| Attributes | Key Insights |
|---|---|
| Historical Size, 2023 | USD 13,621.5 million |
| Estimated Size, 2024 | USD 16,100.6 million |
| Projected Size, 2034 | USD 85,707.2 million |
| Value-based CAGR (2024 to 2034) | 18.2% |
Various country’s government are tightening their cybersecurity measures which is expected to drive the cybersecurity insurance market growth in forecast period. These authorities are focusing on investment in cybersecurity sector to defend the increasing data thefts and breaches.
They are making substantial investments in laws & regulations, and research, & infrastructure. This proactive strategy strengthens national cyberattack defenses. Additionally, it has a cumulative effect that increases the growth of cybersecurity insurance market.
Moreover, government spending on cybersecurity is endorsing invention and alliance in the private sector. Technological progress in cybersecurity are being made possible by grants, funding, and collaborations between the public & commercial sectors in R&Ds.
These advancements not only raise the standard for security in general but also present new opportunities for cybersecurity insurance companies. Businesses that use these cutting-edge technology expose themselves to new risks and shortcomings, which makes full insurance coverage more important.
Various cybersecurity companies are growing their presences in emerging markets to improve their brand recognition, creating positive market outlook. For instance, in June 2024, technology company, Cisco Systems, Inc. announced to launch a cybersecurity center in Taiwan, marking an important investment in the country’s technology substructure. This steps targets to augment cybersecurity abilities and support local businesses in protecting against cyber threats.
The below table presents the anticipated CAGR for the global cybersecurity insurance market over several semi-annual periods spanning from 2024 to 2034. This assessment outlines changes in the cybersecurity insurance industry and identify revenue trends, offering key decision makers an understanding about market performance throughout the year.
H1 symbolizes first half of the year from January to June, H2 spans from July to December, which is the second half. In the first half (H1) of the year from 2023 to 2033, the business is expected to grow at a CAGR of 17.8%, followed by an increased growth rate of 18.8% in the second half (H2) of the same year.
| Particular | Value CAGR |
|---|---|
| H1, 2023 | 17.8% (2023 to 2033) |
| H2, 2023 | 18.8% (2023 to 2033) |
| H1, 2024 | 17.5% (2024 to 2034) |
| H2, 2024 | 18.9% (2024 to 2034) |
Moving into the subsequent period, from H1 2024 to H2 2034, the CAGR is projected to increase slightly to 17.5% in the first half and remain higher at 18.9% in the second half. In the first half (H1) the market witnessed a decrease of 30 BPS while in the second half (H2), the market witnessed an increase of 10 BPS.
Rising Cooperation between Cyber Insurers and Service Providers is an Emerging Trend in Cybersecurity Insurance Market
Cyber insurer’s players seek customers that have accurate threat detection and rapid incident response. However, majority of companies across the globe with low resources are victims of cybersecurity skills shortages and may not fulfill the requirements of cyber insurance companies.
These problem can be addressed with the by partnering with the managed security service provider (MSSP). They offers complete outsourced security solutions that assist these companies in fulfilling the security demands. It also helps businesses in filling the gaps in internal security team, helping them to defend.
Majority of market players are establishing strategic partnerships with the cybersecurity technology providers to improve their service offerings. Such an initiatives is bodes well for the cybersecurity insurance market. For instance, in June 2024, investment banking company, AXIS Capital Holdings Limited partnered with cybersecurity technology company, Elpha Secure to expand its offerings in cyber insurances.
This is intended for USA customers to reduce their exposure to cyber threats, and improve their risk profiles. Moreover, AXIS Capital Holdings Limited also unveiled a service, AXIS Cyber Incident Commander, designed to support cyber insurance policy holders during cyber incidents. This provides quick assistance on crisis management, and legal actions which are available 24/7. This helps to reduce the impact of cyber incidents, and initiate faster recovery.
Integration of Artificial Intelligence (AI) is fueling the Cybersecurity Insurance Market Growth
Incorporation of AI and machine learning models in the cyber insurances is reshaping the landscape of the market. With the integration of AI and ML, cyber insurers can focus on other crucial tasks over the low-priority areas. This allows cyber insurers to enhance their underwriting operations and improve risk assessment.
AI and computer vision solutions possess an ability to extract and process data from natural language processing. This ensure the security terms validation and accelerates the underwriting process. It also allows cyber security professionals to review security procedures impact at higher scale as compared to manual review.
Insurers majorly uses questionnaires to collect data related to incident loss history, security measures, and data handling. They assess this data to understand the vulnerability and health of the security systems. This process can be made very effective by integrating these values in supervised learning models powered by AI.
This solutions assist insurance companies by providing comprehensive understanding of the clients IT environments and determine the risk levels of their portfolio. Such a use of AI is anticipated to drive the cybersecurity insurance market growth notable in the projected timeframe.
Supportive Regulations for Cybersecurity is Creating Opportunities for Market Growth
Growing focus of multiple industries towards cybersecurity is expected to create favorable environment for cybersecurity insurance market. Governments of various countries are drafting rules & regulations to improve the security. Any of the regulations have mandated businesses to implement digital security solutions which is favoring the growth of cyber insurance market.
Regulators have also increased efforts to alleviate cyber risks and protect businesses. This is initiated by passing regulations to monitor insurers and their cyber insurance offerings. For instance, Cybersecurity Information Sharing Act of 2015 outlines the framework for sharing cybersecurity information between federal and non-federal entities. The act intends to simplify the sharing of cyber threat indicators and protective measures to improve cybersecurity across various sectors.
Regulations are intended to improve cyber risk environment and reduce threats. This also necessitates businesses to have data privacy standards and cybersecurity solutions before seeking insurance. The regulations will ensure better cyber security measures and improved digital service delivers. This will favor the growth of the cybersecurity insurance market growth.
Lack of Awareness and Standardization may affect Cybersecurity Insurance Market Growth in the Projected Timeframe
Though cybersecurity insurance market is growing notably, lack of standardization and awareness may restrict the market growth. Mostly small and medium enterprises are less aware of the cyber insurance services. This lack of awareness leads to a limited understanding of the benefits and necessity of cybersecurity insurance, causing lower adoption rates.
Moreover, underwriting procedure is made more difficult by the lack of proven procedures for assessing cyber risks. Differences in the methods and standards used by insurers can result in inconsistencies in the way risk is measured. Due to this, it is challenging for businesses to understand their coverage alternatives and compare policies. This lack of standardization affects the offerings clarity making client to avoid insurance cover.
It also adds to the larger difficulty of making sure that different industries' varying degrees of cyber risk are properly covered. Potential clients may get confused as a result of this inconsistency, which would further impede market adoption. Comparing and choosing the right insurance products is another difficult task for businesses due to the variation in policy terms, coverage limits, and exclusions.
Comprehensive cybersecurity insurance is clearly necessary, given the rapid evolution of cyber risks in recent years. However, the market might find it difficult to realize its full growth potential during the projected period until there is a clearer understanding of these risks and the implementation of established methods.
The global cybersecurity insurance market registered a CAGR of 17.3% during the historic period between 2019 and 2023. The growth of cybersecurity insurance industry was progressive as it reached a value of USD 13,621.5 million in 2023 from USD 6,978.4 million in 2019.
The market for cybersecurity insurance saw notable growth from 2019 to 2023. In 2019, the growth was driven by increasing cyberattacks fueled by the notable digitization across the globe. Moreover, there was increase in adoption of cloud-based solutions, automation tools, and emergence of progressive analytics. The companies were recognizing the importance of the cybersecurity which were creating opportunities for the industry expansion.
In early 2020, COVID-19 pandemic fueled the digitization in multiple industries driving the cyber insurance market growth remarkably. The businesses were shifting their operations over the cloud, which was necessitating the strong cybersecurity measure to protect their sensitive data.
Moreover, need for virtual sales interactions and remote work increased demand for cybersecurity Insurance. These platforms need sensor data analytics, collaborative capabilities, and reliable remote access which resulted into high market growth in year.
Post pandemic, market continued to witness notable expansion driven by improved user experiences and innovations in AI. The growth is also driven by the increasing regulatory pressures and the implementation of stricter data protection laws.
This forced end-user businesses to implement strong cybersecurity measures including insurance to avoid any legal problems and penalties. Moreover, various cyber insurance companies partnered with technology providers to implement advance features such as automation, regulatory compliance, and incident response plants. This initiatives were focused to attract potential businesses clientele and increase their revenue streams.
In the global cybersecurity insurance market, Tier 1 companies hold a notable market share of 45% to 50%, making them the market leaders. These companies have established strong client bases across the globe. Tier 1 players focuses on partnering with cybersecurity solutions providers to improve the reliability of their solution services.
This players are also engaged in mergers and acquisitions to expand the portfolio of their cyber insurance components, and retain their high market position. Key companies in the tier 1 are American International Group Inc., Axis Capital, Lockton Companies Inc., Zurich Insurance Co. Ltd., Aon PLC, and Munich RE.
Tier 2 companies may not have extensive global reach as tier 1 players but holds respectable market share. These players are focused on providing tailored solutions to the clients’ needs. This cybersecurity insurance providers have strong knowledge of the regional markets.
With this knowledge, these companies develop their solutions accordingly to attract potential business clients and improve their brand representation. They also focuses on superior customer services to increase customer retention rate and brand identity. Prominent companies in tier 2 contain Hiscox, CNA Financial Corporation, Allianz, Berkshire Hathaway, and Liberty Mutual.
Tier 3 businesses are small sized firms and emerging startups that may lacks the global customer network as compared to tier 1 and tier 2 players. These market players are well-known for their cost-effective and innovative insurance solutions and services. This players majorly partners with third party policy providers to expand their product market availability and brand presence.
The section below covers the industry analysis for the cybersecurity insurance market for different countries. Market demand analysis on key countries in several regions of the globe, including the USA, Germany, China, India, Brazil, and UK is provided.
The United States is anticipated to remain at the forefront in North America, with a value share of 72.36% through 2034. In East Asia, South Korea is projected to witness a CAGR of 11.2% by 2034.
| Countries | Value CAGR (2024 to 2034) |
|---|---|
| USA | 16.2% |
| Germany | 15.7% |
| China | 18.6% |
| India | 19.1% |
| UK | 16.8% |
North America, spearheaded by the USA which currently holds around 77.81% share of the North America cybersecurity insurance industry. USA cybersecurity insurance market is anticipated to grow at a CAGR of 16.2% throughout the forecast period.
The federal and state governments in country have introduced strict rules for the incorporation of cybersecurity. For instance, the New York Department of Financial Services (NYDFS) Cybersecurity Regulation mandates that financial institutions should implement vigorous cybersecurity methods.
This encourages the inclusion of cybersecurity solutions including insurance in their security management frameworks. Similarly, California Privacy Rights Act (CPRA), increase the responsibility of companies for data breaches, stimulating many businesses to seek cybersecurity insurance to ease financial risks.
China’s cybersecurity insurance market is poised to exhibit a CAGR of 18.6% between 2024 and 2034. Currently, it holds the significant market share in the East Asia market, and the dominance is expected to continue through the forecast period.
With the growing digitization in industrial sector is creating need for robust cybersecurity measure in China.
The government in the country are outlining strategies to strengthen the industrial cybersecurity and protect the sensitive data. For instance, in February 2024, ministry of industry and information technology (MIIT) in China unveiled the plan to improve the country’s industrial sector to reduce their dependency on foreign cybersecurity solutions and address key risk scenarios.
This includes ransomware attacks on connected machineries, uncontrolled remote operations, and illegal operations by workforce. This will create positive outlook for cybersecurity insurance market in the forecast period in China.
India’s cybersecurity insurance market is expected to witness a CAGR of 19.1% in the forecast period and hold considerable market share in South Asia & Pacific region through 2034. In India, organizations from BFSI sector are increasingly embracing digital transformation. These includes online banking, digital payments, and fintech services. Increasing digital transformation in banks is creating space for frequent cyberattacks.
Additionally, the increasing interconnectivity within the financial ecosystem where banks, insurance companies, and fintech firms share data further amplifies the risk of cyber threats. These makes cybersecurity insurance an important component of risk management. This trend is driving demand for tailored insurance products that cater specifically to the unique risks faced by the BFSI sector in India.
The section contains information about the leading segments in the industry. By component, servcies segment is estimated to grow at a CAGR of 19.5% throughout 2034. Additionally, the by industry, retail & ecommerce segment is projected to expand at 18.6% till 2034.
| Component | Solution |
|---|---|
| Value Share (2024) | 60.3% |
Solution segment is expected to acquire share of 60.3% in the market in terms of component in 2024. Rising usage of cybersecurity insurance solutions such as analytics platform, and disaster recovery is propelling the segment growth.
Analytics platform are used notably to identify gaps between security measures, measuring policy coverage, and ensuring the insurance process is executed within legal requirements. Businesses seek comprehensive suite of insurance solutions to address their costs associated with data recovery and setting third-party lawsuits.
| Industry | IT & Telecom |
|---|---|
| Value Share (2024) | 26.3% |
The IT & telecom segment is expected to capture share of 26.3% in 2024. IT and telecom companies are shifting their focus towards cybersecurity insurance to protect the financial loss incurred due to data theft. These companies often buys cyber insurance policies to protect their monetary losses due to cyberattacks on IT infrastructure and information governance.
An organization might reduce its legal costs by purchasing cyber insurance coverage in case it violates any privacy policies or laws. Additionally, it will assist them in hiring computer forensics or security specialists that can help them recover compromised data or prevent the attack.
Key players operating in the cybersecurity insurance market are investing in advanced technologies and also entering into partnerships. Key cybersecurity insurance providers have also been acquiring smaller players to grow their presence to further penetrate the market across multiple regions.
Recent Industry Developments in Cybersecurity Insurance Market:
In terms of component, the industry is divided into solution and services.
In terms of enterprise size, the industry is divided into small & medium enterprises and large enterprises.
The industry is classified by industry as retail and e-commerce, IT and telecom, BFSI, healthcare and life sciences, manufacturing, automotive, and others.
Key countries of North America, Latin America, East Asia, South Asia & Pacific, Western Europe, Eastern Europe, and Middle East & Africa (MEA) have been covered in the report.
The global cybersecurity insurance industry is projected to witness CAGR of 18.2% between 2024 and 2034.
The global cybersecurity insurance industry stood at USD 13,621.5 million in 2023.
The global cybersecurity insurance industry is anticipated to reach USD 85,707.2 million by 2034 end.
South Asia & Pacific is set to record the highest CAGR of 18.8% in the assessment period.
The key players operating in the global cybersecurity insurance industry include American International Group Inc., Axis Capital, Lockton Companies Inc., Zurich Insurance Co. Ltd., Aon PLC, and Munich RE.
Cybersecurity Insurance Market
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