by Cyber security insurance has emerged as an important risk transfer method for organizations across sectors to safeguard themselves against financial losses arising due to cyber threats such as data breaches, hacking, ransomware and other cyber crimes. Cyber security insurance provides coverage against costs of notifying clients in case of a breach, costs associated with credit monitoring for affected clients, legal costs of privacy law investigations and lawsuits, PR and investigative costs, and payment of ransom in some plans. The global healthcare industry has seen a rise in sophisticated cyber attacks aiming to steal sensitive patient data over the past year. Similarly, financial sector organizations such as banks and other payment processors are also high value targets for cyber criminals. The need to mitigate risks of business interruptions, revenue losses, and reputation damage has stimulated demand for cyber security insurance products.
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 key trends:
One of the major trends in the cyber security insurance market is the emergence of personalized cyber policies catered for different business sectors. Insurers are offering tailored coverage endorsements and benefits specific to healthcare, finance, retail and other industries based on their unique exposures and cyber risks. For example, policies for healthcare companies provide additional coverage for HIPAA violations, ransomware attacks and IP theft. Similarly, insurers are rolling out policies with broader terms and conditions to cover risks arising from cloud platform vulnerabilities and supply chain attacks. Another notable trend is the shortening of policy renewal cycles from annual to six months or quarterly basis, allowing customers to adjust coverage as cyber threats evolve. Insurers are also promoting usage-based pricing models wherein premium amounts flex with organizations’ investments and best practices on cyber security controls and resilience capabilities. This helps optimizing insurance outlays based on demonstrable risk management efforts.
Porter’s Analysis
Threat of new entrants: The cyber security insurance market requires high capital investments and technical expertise. Large insurers have an advantage over small players due to economies of scale.
Bargaining power of buyers: The bargaining power of buyers is moderate. While insurance buyers seek personalized coverage at competitive premiums, only a few major insurers dominate the market.
Bargaining power of suppliers: A wide range of tools and services are available from cyber security vendors. However, insurance underwriters have significant control over supplier selection and pricing.
Threat of new substitutes: Few substitutes exist for cyber security insurance. Self-insurance involves greater financial risk while other solutions like cyber security consulting offer limited coverage.
Competitive rivalry: The market is growing rapidly but dominated by global insurers. Competition focuses on improving coverage, enhancing customer experience and leveraging data analytics.
Key Takeaways
The Global Cyber Security Insurance Market Size is expected to witness high growth.
Regional analysis: North America accounts for over 35% market share followed by Europe and Asia Pacific. stringent regulations such as Europe’s GDPR and California Consumer Privacy Act (CCPA) in the US drive demand. Growth across Asia Pacific is supported by initiatives such as India’s data protection bill aiming to implement safety standards.
Key players: 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. are some major players in the cyber security insurance market. These companies focus on collaboration, new product development and partnerships to cater to the evolving insurance needs of businesses.
