Cyber security insurance provides coverage against internet security and privacy risks. It protects businesses and individuals from losses associated with cybersecurity breaches such as data theft, network outages, and losses resulting from cyber extortion. The insurance is increasingly important for companies as they hold more data online and become more dependent on technology. It covers costs related to forensic investigations, recovery and restoration efforts, notification obligations, credit monitoring for clients or customers affected by a breach, legal costs, and other expenses. The global cyber security insurance market has witnessed substantial growth over recent years due to the rising trend of online banking, increasing penetration of smartphones and IoT devices which makes the organizations prone to online attacks. The global cyber security insurance Market is estimated to be valued at US$ 15.7 Mn in 2024 and is expected to exhibit a CAGR of 7.8% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Growing concerns over cyber security threats is one of the primary drivers enhancing the adoption of insurance coverage. Cyber security risks have intensified in recent times due to increase in online frauds, hacking, and ransomware attacks. Furthermore, companies are facing stringent data privacy regulations such as General Data Protection Regulation (GDPR) which necessitates robust security practices and penalty for non-compliance, thereby raising demand for such policies. For example, GDPR fines businesses up to 4% of annual global turnover or €20 million for major infringements or non-compliance. Similarly, the growing deployment of new technologies such as IoT, AI and blockchain is creating new avenues for cyber criminals to target systems or data. As technologies proliferate, so does the interconnectedness of networks and associated vulnerabilities, increasing the need for insurance as risk mitigation.
Segment Analysis
The global cyber security insurance market is dominated by the enterprise segment. Within the enterprise segment, large enterprises accounting for over 60% share as they face higher risks of cyber threats due to larger attack surface and hold sensitive customer data. The adoption of cyber security insurance is higher among large enterprises to transfer the risk of data breach and incurring huge losses. SMEs segment is expected to witness fastest growth during the forecast period due to increasing cognizance about cyber risks and associated costs.
PEST Analysis
Political: growing regulatory pressures and stringent data privacy laws such as GDPR are compelling organizations to purchase cyber insurance policies for protection against legal liabilities.
Economic: increasing costs of cyber attacks and data breaches are prompting enterprises to invest in insurance covers. The insurance helps reduce financial distress during cyber security incidents.
Social: rising awareness about identity theft and digital frauds among consumers is pushing enterprises to strengthen security and risk management protocols including insurance.
Technological: proliferation of digital devices, cloud services and Bring Your Own Device trend have vastly expanded the threat landscape. This is boosting demand for cyber security solutions and related insurance products.
Key Takeaways
The Global Cyber Security Insurance Market Size is expected to witness high growth during the forecast period driven by rapid digital transformation, growing frequency of cyber-attacks and stringent regulations.
North America dominates currently due to robust regulatory environment and presence of major players such as Advacare Pharma, UEBE Medical, and Abbott Laboratories. The region is expected to continue its lead, supported by stringent laws and proactive initiatives by government and private organizations to enhance cyber resilience.
Key players operating in the cyber security insurance market are Advacare Pharma, UEBE Medical, Abbott Laboratories, Quidel Corporation, HiLin Life Products Inc., Geratherm Medical AG, Fertility Focus Limited, Fairhaven Health LLC, Church & Dwight Co. Inc., and Prestige Brands Holdings Inc., among others. These players are focusing on developing holistic insurance offerings to address the dynamic threat landscape and diversified needs of customers across industries and regions.
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