From $5,573.2 million in 2019, the global cyber insurance market is expected to grow at a CAGR of 26.3% from 2019 to 2030. According to a report published by the market research company, P&S Intelligence, the prime factors driving the market are the growing implementation of government policies related to cyber security, speedy digitalization of business operations, increasing incidences of cyber-attacks, and enactment of cyber insurance policies for extenuating risks. The growing frequency of cybercrimes and increasing awareness of cyber security are fueling the implementation of cyber insurance policies.
Various industries are increasingly adopting cyber insurance solutions as their weapon for fighting against various cyber risks. Moreover, for reducing the incidence of cyber attacks the governments of several countries across the globe are also enacting policies that mandate the adoption of cyber security regulations. These policies are strict and often involve the imposition of heavy fines for data breaches, thereby leading to a rise in the demand for cyber security solutions including cyber insurance.
Within the policy segment of the cyber insurance market, the category of data breach policy was holding the largest share in 2019. The prevalence of data breaches has increased massively in recent years, due to the surging adoption of cloud computing solutions, digital data, and workforce mobility. Organizations and customers generally use the database of enterprises, local machines, and cloud servers to store data which sometimes are at risk of data breaches. The surging awareness about the security that the data breach policy through cyber insurance offers is propelling the progress of the category.
Another segmentation of the cyber insurance market is based on the product type, under which, the integrated category is expected to exhibit faster growth in the coming years. This is attributed due to the surging adoption of integrated solutions by the small and medium enterprises (SMEs) used for data coverage, data replacements, data restoration expenses, and breach losses. Therefore, with the soaring number of SMEs, the need for integrated cyber insurance policies is set to propel rapidly.
In the preceding years, North America dominated the cyber insurance market globally and the major factor supporting this growth was the existence of major cyber insurance service providing organizations namely, Chubb Group Holdings Inc., American International Group, and Lockton Incorporated in the region. Moreover, the ratification of different policies aiming at the legal framework related to cyber security is also one of the major factors propelling the cyber insurance adoption in the region.
Therefore, the demand for cyber insurance will surge globally in the coming years due to the rising threats of cyber-attacks and data breaches and the implementation of favorable policies by the governments of several countries.
