Cyber security risk is not just solely a digital risk, it covers the physical world of tangible assets as well, for instance, hacking into a fire protection sprinkler system could lead to flooding and damage to physical property. An integrated understanding of cyber risk is critical to fully address the range of threats that can arise out of it. Cyber risk is a bridge between tangible and intangible assets, which leaves organizations exposed to a wide scale of damage. Cyber insurance was historically focused on digital assets, such as client’s personal data or transactional data. The rise in cyber-attacks apart from its wide usage has led to think for other lines such as personal (reputation), property (physical damage), and intellectual property (competitor information).
While cyber insurance was initially purchased by Technology, Media and Telecom (TMT) companies and professional services firms. In recent years, the demand has been predominately driven by large corporations storing personally identifiable information and processing vast amount of financial transactions, i.e. large retailers, heavily regulated financial institutions.
Cases of unauthorized stealing or accessing sensitive business data, such as intellectual properties, employees' personal information or even financial records has been rising which in turn, is driving the cyber security insurance market.
Cyber security insurance market is expected to witness strong growth owing to rise in cyber data breaches and threats and increasing adoption of cloud-based services. Global cyber security insurance market is expected to record a CAGR of 30% over the forecast period. The market is expected to mark a valuation of more than USD 30 billion at the end of the forecast period.
The market is segmented by company revenue (very small companies ($2.5 million to $99 million), small companies ($100 million to $299 million), medium sized companies ($300 Million to $1 Billion) and large companies ($1.1 Billion and above), out of which, the large companies pay larger premium for cyber liability policies, as they need to pay high cost to recover losses. Based on industry vertical the cyber insurance market can be bifurcated into healthcare, retail, banking and financial services, information technology and others. CLICK TO DOWNLOAD SAMPLE REPORT
Rise in incidents related to unauthorized stealing or accessing sensitive business data, like intellectual properties, employees’ personal information, or even financial records is majorly driving the growth of the cyber security insurance market. Cloud computing is one of the recent technologies that is being adopted on a large scale to reduce the conventional boundaries of IT. The growing demand for cyber insurance coverage are in sectors beyond banking or financial institutions and healthcare facilities, such as professional services. Companies of different sizes and verticals are now purchasing cyber insurance policies, owing to mandatory legal developments. Low market penetration factors of cyber insurance policies in developing countries promotes promising growth.
The complexity and ever-changing technology limits the cyber insurance market growth. According to a study, many companies (very small and small sized revenue companies) do not have themselves insured against cyber threats. It is anticipated that 60% of FORTUNE 500 companies currently lack any insurance against cyber incidents mainly due to the lack of adequate cyber insurance solutions. In particular, intangible assets are largely uncovered, and cyber incidents such as data breach is the single biggest cyber concern of corporate executives.
Our-in depth analysis of the global cyber security insurance includes the following segments:
On the basis of regional analysis, the global cyber security insurance market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region.
North America, particularly U.S. dominates the cyber insurance market, since most cyber security insurance underwriters are based in the region. Mandatory legislation pertaining to cyber security in several U.S. states is leading to higher penetration of cyber liability insurance policies. Asia Pacific spending on cyber liability is on the rise as this region is prone to such attacks owing to poor protection against the same. Additionally, there is a huge demand from telecom providers from this region. Europe region has less penetration of cyber security insurance policies as compared to that of the U.S. The European council recently passed protocols regarding data protection and security, which are expected to be brought into effect, these regulations would oblige companies to purchase cyber insurance policies.
The cyber security insurance market is further classified on the basis of region as follows:
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