Cyber Insurance Market to be Worth Over $90bn by 2033

The global cyber insurance market is forecasted to surpass $90.6 billion by 2033, experiencing a robust compound annual growth rate (CAGR) of 22.3% from 2023, as analyzed by Market.Us. By the end of 2024, the industry is anticipated to reach $14.8 billion, marking a significant increase from the projected valuation of $12.1 billion in 2023.

Several factors contribute to this growth:

1. Escalating cyber threats and attacks

2. Evolving regulatory environment

3. Increasing financial impact of cyber incidents

4. Growing awareness and understanding of cyber risks

In the cyber insurance landscape of 2023, standalone cyber insurance policies dominated the market, capturing more than two-thirds (68%). These policies are customized to address specific cyber threats faced by businesses, such as data breaches and ransomware. Large organizations, especially in industries highly susceptible to cyber threats like finance and healthcare, favor standalone policies.

Third-party coverage also played a significant role, holding a 62.1% share in the cyber insurance market. These policies cover liabilities and legal costs arising from breaches affecting customers and other parties’ data. Businesses handling sensitive customer data are increasingly investing in third-party coverage due to the growth of data protection regulations, bringing about the risk of lawsuits and fines.

Large business coverage constituted nearly three-quarters (72.4%) of the cyber insurance market value in 2023. This is primarily attributed to the vast and complex digital infrastructure of large enterprises, exposing them to particularly high risks of damaging cyber incidents.

The banking, financial services, and insurance (BFSI) sector held the largest market share at 28.3%. The prevalence of sensitive financial information in these industries makes them prime targets for cybercriminals. As a result, these businesses heavily invest in cyber insurance policies to mitigate the financial and reputational risks associated with incidents like data breaches and online fraud.

Regionally, North America claimed the largest market share, accounting for 37.6% ($4.5 billion). This dominance is attributed to the region’s advanced technological infrastructure, the presence of major global corporations, and heightened awareness of cyber threats.

The report suggests opportunities for cyber insurers to enhance their value by:

1. Tailoring policies for specific industries to address unique risks and compliance requirements.

2. Providing holistic risk management services, including cybersecurity assessments, incident response planning, and employee training.

3. Partnering with cybersecurity firms to integrate capabilities such as risk assessment services, threat intelligence, and incident response capabilities.