The global cyber insurance market size could reach $17bn in premium by 2023, growing over 20 percent compound annual growth rate (CAGR) according to a new report by P&S Market Research Global.
Among all industries, the largest consumer of cyber insurance has been the banking financial services and insurance (BFSI) sector as these companies are more prone to cyber-attacks – contributing over 35 percent of global market share in 2016.
However, P&S said the retail and manufacturing industries will witness the fastest growth in cyber cover demand between 2017 and 2023, as a result of the 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 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.
Over the last few years, cyber analysts have been tracking the rapid increase in criminalisation of the internet. They have identified that individual cyber criminals are uniting into international criminal groups to bolster the impact of their attacks against critical business data. The growing threat landscape has thus led to an increase in the awareness of and interest in cyber insurance, thereby escalating the growth of cyber insurance market globally.
The increasing interconnectivity, commercialization, and globalization of cybercrime are accelerating greater frequency and severity of cyber incidents which includes past data breach incidents, according to P&S, which it said has had a positive direct impact on the growth of the cyber insurance market. From individual companies to government organizations, an attack by hacker can inflict huge financial loss, corporate embarrassment, and business continuity failure.
The growth in demand for cyber cover by business leaders looking to protect enterprise data from cyber-attacks and cyber criminals will continue to encourage (re)insurance innovation and investment into new products as the industry adapts to meet the needs of the growing intangible asset economy.
According to P&S, some of the major companies in the growing cyber risk cover market include AIG, Chubb, Zurich, XL Group, Berkshire Hathaway, Allianz Global Corporate & Specialty and Munich Re.
These competitors in the cyber insurance market have been investing in new product launches and strategies to suit the larger market and expand their offerings globally, P&S added.