The Cyber Insurance Market is Growing: What’s Behind the Increased Demand?

Cyber Insurance

The Cyber Insurance Market is Growing: What’s Behind the Increased Demand?

The threat of cyberattacks looms large for businesses and individuals. The risk of data breaches and malware attacks has become a primary concern. Cyberattacks can cause financial ruin and destroy reputations in minutes. As a result, the demand for cyber insurance has significantly increased over the last several years.

Understanding the Cyber Insurance Market

What Is Cyber Insurance?

Cyber insurance is a type of insurance policy that provides financial protection in case of a cyberattack or infrastructure failure. It can protect against the following events:

● Data breaches

● Ransomware

● Malware attacks

● Network security failure

If a cyber event occurs, the policies help recoup expenses such as legal costs, infrastructure repair fees, data recovery, and regulatory fines.

The Size of the Market

The global cyber insurance market has experienced significant growth over the past five years. According to industry reports, the market size reached $13.33 billion in 2022 and is projected to grow to $84.62 billion by 2030. North America invests the most in cyber insurance, with a market share of over 36%.

Factors Driving the Increased Demand

With these numbers at hand, the question arises about what’s behind the increased demand. Research reveals that the main reasons include:

1. The Rising Threat Landscape

Cyber insurance has increased due to the prevalence of more digital threats. Cyberattacks have become more sophisticated and costly. According to the Harvard Business Review, 83% of businesses have experienced cyberattacks. Moreover, companies lose approximately 7.5% of their stock market value after a data breach.

The attacks target organisations of all sizes and industries. A cyberattack could infect a network with ransomware and encrypt company files. Hackers would then demand payment to release the files back to the organisation.

Phishing scams are another issue affecting the cyber landscape. A phishing attack aims to trick individuals into revealing sensitive information, like login credentials or banking details.

CyberCare

Agile CyberCare covers small businesses against cyber threats and data breaches, including 24/7 emergency response for incidents.

Details Get Quote

Cyber Liability Insurance

Cyber Liability Insurance is designed to help protect you from claims and support your profitability in the event of a cyber breach or attack.

Details Get Quote

CyberSelect

Agile CyberSelect is aimed at mid-market to corporate clients and is a comprehensive Cyber Insurance policy with 16 policy benefits and 24/7 incident response.

Details Get Quote

Phishing scams are another issue affecting the cyber landscape. A phishing attack aims to trick individuals into revealing sensitive information, like login credentials or banking details.

2. Regulatory Compliance Requirements

Governments around the world have implemented stricter cybersecurity regulations. An organisation can face hefty fines if it fails to meet the standards. Cyber insurance can help a business meet liability requirements and cover non-compliance fees.

3. Remote Work and Cloud Adoption

Since 2020, remote work and cloud-based technologies have been standard within most workplaces. With employees accessing sensitive information from various locations and devices, the risk of a breach increases, especially if the employee doesn’t use tools like a VPN. A VPN for a phone or computer encrypts the connection to safeguard data. Cyber insurance provides financial protection if an employee fails to follow security protocols.

4. Better Understanding of Cybersecurity Practices and Tools

Across industries, there’s been an increased focus on cybersecurity measures, such as employee training, network monitoring, and the use of VPNs. Cyber insurance adds another layer of protection. If businesses are targeted, they can recover and rebuild after the incident.

The Future of Cyber Insurance

With the demand increasing and the market size growing, it is expected that the cyber insurance market will also expand in the following areas:

The Role of Technology and Data Analytics

Data analytics will play a critical role as the cyber insurance market evolves. Insurers will lean on advanced analytics and machine learning to assess cyber risks. The tools will help companies underwrite policies more accurately and understand current threats.

Evolving Policy Coverage

Cyber insurance policy inclusions and exclusions require companies to stay current with different technologies impacting the market. With artificial intelligence and the Internet of Things (IoT) rising in popularity, policies will have to go hand-in-hand with these technologies.

Increasing Knowledge of Cybersecurity

As part of cybersecurity risk assessments, insurers and brokers have an ethical responsibility to educate businesses about cybersecurity and possible cyber threats. With businesses and individuals continuing to recognize the importance of protecting themselves against the increasing risks of cyber attacks, the need for cyber insurance will also grow.

Overall, the future of the cyber insurance market looks bright, but it will require ongoing innovation and adaptation to keep up with the ever-changing cyber threat landscape.