Cyber insurance market set to surge
Cyber insurance market set to surge | Insurance Business Asia
Cyber
Cyber insurance market set to surge
Demand spurred by escalating frequency of cyber threats
The cybersecurity insurance market is projected to experience substantial growth in the coming years, according to a new report from research and consulting firm MarketsandMarkets.
The market is expected to expand from US$10.3 billion in 2023 to US$17.6 billion by 2028, representing a compound annual growth rate (CAGR) of 11.4% during the forecast period.
This surge in demand for cybersecurity insurance is primarily fueled by the escalating frequency and breadth of cyber threats, including data breaches, ransomware attacks, and phishing attempts, which have prompted organisations to seek financial protection against potential losses.
Standalone policies taking the lead
The report found that standalone cybersecurity insurance policies are driving the growth of the market. These dedicated policies, which offer specialised coverage solely for cyber risks, are gaining popularity over packaged cybersecurity insurance policies. Organisations are increasingly recognizing the need for comprehensive coverage that addresses the complexities of cyber risks.
Healthcare and life sciences driving demand
The healthcare and life sciences sector is projected to register the highest CAGR in the cybersecurity insurance market during the forecast period, according to the report. This industry faces unique challenges due to regulatory fluctuations and the evolving landscape of cyberattacks and breaches.
Compliance with privacy and data security regulations such as HIPAA and HITECH has made cybersecurity insurance policies crucial for healthcare organisations to cover penalty fees. The COVID-19 pandemic has further amplified cyber threats, with healthcare providers experiencing a surge in attacks like ransomware and misinformation campaigns. Cybersecurity insurance plays a vital role in offering financial protection against cybercrimes, data breaches, and other cybersecurity incidents in the healthcare industry.
Asia Pacific emerges as promising market
Asia Pacific is expected to achieve the highest CAGR in the cybersecurity insurance market during the forecast period, the report found.
Countries such as China, Japan, Australia, New Zealand, and Singapore are significantly investing in security measures to combat increasing cyber threats. With robust government regulations and technological advancements, Asia Pacific presents significant growth opportunities for the market. The region faces a higher risk of cyberattacks compared to others, with insecure interfaces, data breaches, and data losses being the top cybersecurity concerns. The implementation of stringent regulatory measures is expected to drive the demand for cybersecurity insurance in Asia Pacific.
Leading players in the region, including AIG, Allianz, Chubb, and Zurich, are actively operating in this growing market.
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