The cyber insurance market has been forecast to reach almost $17 billion by 2023, growing over 20% CAGR between 2017-2023, according to P&S Market Research Global.
The Banking Financial Services and Insurance (BFSI) sector has been the largest consumer of cyber insurance, as these companies are more prone to cyber-attacks – accounting for over 35% of the global market share in 2016.
However it’s the retail and manufacturing industries that P&S says will see fastest growth in cyber cover demand in coming years due to numerous cyber challenges and risks such as digital supply chain management and online operations.
Loss of brand reputation from cyber-attacks has been cited as a primary reason by most of the industry leaders for the mainstream adoption of cyber insurance programs in their operations.
The increasing interconnectivity, commercialization, and globalization of cybercrime are driving greater frequency and severity of cyber incidents, including past data breach incidents.
The trend of intrusion of unauthorized access entities into critical data and illegitimate access to private and confidential business information has risen along with the threat of cyber-crime, leading to a huge loss of enterprise value, which is expected to continue over a period of time, P&S said.
Cyber analysts tracking the rapid increase in criminalisation of the internet have noted a trend of individual cyber criminals uniting into international criminal groups to increase the impact of their attacks against critical business data.
The growth in demand for cyber cover by business leaders looking to protect enterprise data from cyber-attacks and cyber criminals will continue to spur re/insurance innovation and investment into new products as the industry adapts to meet the needs of the growing intangible asset economy.
Major players in the growing cyber risk cover market include; American International Group, Chubb Limited, Zurich Insurance AG, XL Group, Berkshire Hathaway, Allianz Global Corporate & Specialty SE, and Munich Re, according to P&S.
These competitors in the cyber insurance market have been investing in new product launches and strategies to cater to the larger market and expand their offerings globally: in July 2017 XL Catlin announced the launch of its cyber and data protection insurance policy in Asia-Pacific which aims to protect businesses from the threats they face from a malicious network and breach of data.
Recent high profile computer breaches such as hack of Democratic National Committee and Twitter have reinforced the need for insurance against cyber threats and led to an increase in demand for cyber liabilities and sophisticated policy cover.