Cyber-attacks have adverse impact on businesses such as declining customer base, disruption of business, regulatory fines, legal penalties & attorney fees, loss of intellectual property, and reputational damage.
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Cyber insurance market is set to grow as an outcome of an increase in data breach incidences in past 2-3 years. These attacks escalate in intensity and frequency, and pose a threat to individuals, organizations, and countries.
In the year 2014, there was increased number of cybercrimes with similar repercussions.
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Similarly, financial institutions such as JP Morgan Chase, were also affected more severely, and had to pay huge amount to cover losses. To cater to the same, the stakeholders within the cyber insurance industry use approaches to educate consumers about the losses incurred due to cyber-attacks and stratagems to cope with them.
For instance, Cyber liability insurance, which is available since last ten years, tends to protect business data from such cyber-attacks.
Cyber insurance industry provides insurance products to mitigate risks and associated cost incurred due to cyber-attacks. BFSI, healthcare, and retail sector are the most targeted sectors, witnessing increase in incidences of information and identity theft, scams, and frauds.
However, in the recent years, other industries such as manufacturing, construction, sports & gaming, entertainment, and education have also come under threat from cyber-attacks.
Cyber insurance market growth is aided by a numerous factors. The prime factors include increase in awareness regarding cyber risks and mandatory legislations regarding cyber security in major countries, such as U.S., UK, South Korea, and Australia.
In addition, rise in awareness regarding business interruption (BI) risks and related insurance products is also expected to drive the cyber insurance market. However, as this industry is complex and changes regularly, lack of standardized policies and evolving perils are projected to limit the market growth.
Cyber insurance market has a huge potential; however, it is largely an untapped market. Looking at spate of cyber-attacks, companies look forward to extending cyber liability to their supply chains as well, thus providing new opportunities for cyber liability insurance providers within the cyber insurance industry to innovate their insurance products.
To analyze the global cyber insurance market, the cyber insurance is segmented based on company size, industry vertical, and geography. Companies are categorized as very small companies ($2.5 million to $99 million), small-sized companies ($100 million to $299 million), medium-sized companies ($300 million to $1 billion), and large ($1.1 billion and above).
Among all, large companies pay larger premium for cyber liability policies, as these companies need to pay high cost to recover losses. Different industry vertical covered in this report include healthcare, retail, financial services (BFSI), information technology & services, and others (utilities, energy, manufacturing, construction, and transportation).
The cyber insurance market is analyzed across four geographical regions namely, North America (U.S. and rest of North America), Europe (UK, Germany, France, and rest of Europe), Asia-Pacific (Australia, Singapore, South Korea, Japan, and rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).
North America holds the highest cyber insurance market share, followed by Europe, owing to high frequency of cyber-attacks faced by the U.S. companies.
KEY BENEFITS FOR STAKEHOLDERS
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