Global Cyber Security Insurance Market Size 2018 by Organization Size (SME, Mid-Market and Large Enterprises), by Industry (BFSI, ICT, Healthcare, Manufacturing, Retail and Others), Region and Forecast 2018 to 2025
Dec 2018
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The global Cyber security insurance market size was valued at USD 3.89 billion in 2017, mainly driven by the increasing number of cyber-attacks across the world. In 2017, the total number of publicly disclosed data breaches around the world were 1,579, each costing on an average USD 3.62 million.
Rapidly increasing connected devices both for personal and business purposes, have created new vulnerabilities which the cyber-attackers can exploit. Cloud computing, which is used for outsourcing services and storage, brings a lot of benefits as well as risks. A single attack on a cloud service provider would result in data breach loss for many. A major cyber-attack involving an energy or utility company would cause a significant outage of power or physical damage in the future. Hence, increasing awareness of exposure to cyber threat and its potential impact on the company’s business, has driven the demand for Cyber security insurance market. According to a study done by Ponemon Institute in 2015, the average cost of a data breach was around USD 3.5 million and is expected to increase in the forecast period. These costs include customer notification cost, the costs of reporting a breach to the regulator, PR costs and other legal expenses. Global strengthening of regulations on loss of personally identifiable information (PII) has fuelled the demand for Cyber security insurance across all the sectors. Especially, the General Data Protection Regulation (GDPR) in the European Union (EU) has increased the interest in cyber insurance across Europe. Companies suffering from data breach would be seeing a fine of 4% of their total global revenue according to this regulation. Hence, a big uptick is seen in terms of organizations buying cyber insurance since last year resulting in overall growth of Cyber security market.
Key Segments of the Global Cyber security Insurance Market
Organization Size Overview, 2015-2025 (USD Million)
- SME
- Mid-market
- Large enterprises
Industry Overview, 2015-2025 (USD Million)
- BFSI
- ICT
- Healthcare
- Manufacturing
- Retail
- Others
Regional Overview, 2015-2025 (USD Million)
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- Rest of Europe
- Asia-Pacific
- India
- China
- Rest of Asia-Pacific
- Rest of the World
Reasons for the study
- The purpose of the study is to give an exhaustive outlook of the global Cyber security insurance industry.
- Rising concerns of data breach events and increasing awareness among various organizations are some of the factors encouraging the adoption of cyber insurance. This prompted us to understand the adoption rates of Cyber security insurance in major target countries
- Cyber security is considered to be one of the top 5 risks by most of the security professionals around the globe across every sector. It is a veritable threat and an opportunity for insurance players to capitalize on. We were curious to understand how the market players are inclined to respond to such an opportunity.
What does the report include?
- The study on the global Cyber security insurance market includes qualitative factors such as drivers, restraints, and opportunities
- Additionally, the market has been evaluated using the Porter’s five forces analysis.
- The study covers qualitative and quantitative analysis of the market segmented on the basis of organization size, industry and region. Moreover, the study provides similar information for the key geographies.
- Actual market sizes and forecasts have been provided for all the above-mentioned segments
- The study includes the profiles of key players in the market with a significant global and/or regional presence
Who should buy this report?
This study is suitable for industry participants and stakeholders in the cyber insurance market. The report will benefit:
- Executives of the cyber insurance companies.
- Managers within financial institutions looking to publish recent and forecasted statistics pertaining to the cyber insurance market.
- Venture capitalist looking into investing capital.
- Government organizations, regulatory authorities, policymakers and financial organizations looking for innovative Cyber security insurance solutions.
- Analysts, researchers, educators, strategy managers, and academic institutions looking for insights into the market to determine future strategies.
Early adopters of cyber insurance are the companies which hold large volumes of personal data, such as in healthcare, retail and other sectors that rely on digital technologies such as manufacturing, telecom and logistics. Furthermore, there has been a growing interests among financial institutions, energy, utility and transport sector, driving the global cyber insurance demand. Also, many companies have started concentrating to extend their insurance cover to their supply chain to reduce the cyber risk. The demand for cyber insurance has grown beyond data breach cover. Most of the companies demand for products which cover property damage and financial losses resulting from a cyber-attack. Collectively, all these factors will have a positive influence on the growth of cyber insurance market in the coming years.
The most critical challenges that the cyber security insurers face are quantifying a new cyber risk and lack of cyber-security incident data in support of risk assessment, which would allow the insurers to differentiate customers on the basis of risk. Even the world famous Warren Buffet has expressed scepticism on the cyber insurance business. On being asked for his views on Cyber security insurance in one his company’s annual meetings in 2018, he said
“Anyone who claims to know the base case or worst case for losses is kidding themselves”.
The traditional cyber insurance products cover data breach, extortion, data and software loss and network and service liability. There are few intangible assets, which are similarly exposed to the cyber threats but are often uninsured or sometimes not covered by the cyber insurers. During the years 1975 to 2015, the value of intangible assets as a ratio of the total enterprise value (S&P 500 companies) rose from 17% to 84%, as per the report published by Ocean Tomo. Most of the intangible assets across the world are currently uninsured and serve as big opportunity for Cyber security insurers.
US-China Cyber relationship: In 2015, the US and China launched a combined effort against the cyber spying for commercial gain. Both the countries formed a common insurance fund with each contributing USD 1 billion. Private companies (insurers) in each country could file the claims to draw the money from this fund to relieve the financial losses suffered by cyber-attacks initiated by someone in the other country. For example, if an American company suffered a breach and financial loss as the result of a Chinese cyber-criminal activity, the American company could draw on the fund to cover the damages. Ascription would be completed through combined law enforcement investigations or by the insurance fund itself.
According to the size of the end-use organization, the Cyber security insurance market can be broadly categorized into small & medium enterprises (SME), mid-market and large enterprises. In this study, all the organizations will an annual turnover of less than USD 100 million are considered under SME, USD 100 million to one billion are considered under mid-market and large enterprises are those with turnovers more than a billion USD. Among these, the mid-market companies had the highest market share, just followed by the large enterprises. However, the demand for cyber insurance among the SME sector is anticipated to grow with the highest growth rate in the coming years, owing to the rising awareness of cyber-attacks and government regulations, which the organizations should be in comply with. For instance, GDPR which was implemented by the European Union (EU) in 2018, has led to a sudden rise of Cyber security solutions uptake in Europe. Companies suffering from data breach would be seeing a fine of 4% of their total global revenue according to this regulation. Hence, this will have a positive impact on the global Cyber security insurance market.
Based on the end-use industry, the cyber insurance market can be segmented into BFSI, Information & Communication Technology (ICT), healthcare, manufacturing and others. Among these, the banking and financial services sector had the highest market share in 2017 and would continue to dominate until 2025. BFSI organizations have their intellectual properties insured the most, as compared to the other verticals. Nevertheless, the ICT segment is anticipated to grow with the highest growth rate in the forecast period as companies belonging to this industry vertical hold tons of personal information of the customers and thus, are more prone to the cyber-attacks. Also, strengthening global regulations on loss of personally identifiable information (PII) will drive the cyber insurance premiums from the ICT sector. The companies in healthcare sector are progressively purchasing data breach cover to protect sensitive patient information they hold. This is largely motivated by the HIPAA legislation, which offers data privacy and security requirements for protecting medical information, and now holds companies accountable in the event of breach. While cyber insurance was primarily purchased by ICT companies and professional service firms, in recent years demand has been mostly driven by the large businesses who store personally identifiable information (PII) and process vast amount of financial transactions, i.e. large retailers. The retail atmosphere is frequently changing and developing while the global marketplace remains extremely competitive. Retailers face massive challenges to efficiently manage their increasing risk exposures across developing technologies, new geographies, and extended supply chains. The other industry vertical include insurance premiums collected from the education, transportation, energy, hospitality and other niche sectors. With rapid digitalization, most of the companies have started to generate a plethora of data, which could potentially targeted by the cyber criminals. Hence, the cyber insurance market for these industry verticals is poised to grow in the forecast period.
The cyber insurance market is controlled by the U.S. with some of the European countries contributing to the total premiums in 2017. The North American region has always been the most forward to adopt new technologies and a hub for technological innovation. With new technologies come new threats and thus, US has the greatest number of data breaches recorded in the year 2017. So, the demand for cyber insurance has always been high in the U.S. with European countries starting to mushroom along with some Asian countries. Government regulations, being one of the major driver of the cyber insurance market have started to show up for different countries. For instance, Singapore, Malaysia, Vietnam, and China have either introduced or updated their first layer of Cyber security, data privacy laws, security, and control of data. For instance, China introduced a sequence of legislative reforms in recent years that seek to ensure stronger data protection. The Australian government passed a privacy amendment bill in February 2017, which states that Australian organizations will now have to publicly reveal any data breaches, with penalties ranging from $360,000 for responsible individuals to $1.8 million for organizations.
All the companies doing business with clients and prospects in the EU will need to comply with new legislation (GDPR), else they could be fined up to 2 to 4% of their global revenue depending upon the type of activity and subject to monetary caps. The UK had the major share in the cyber insurance market of the Europe region, mainly driven by the growing awareness of proliferating cyber threats across various sectors and the government regulations.
Cybercrime is becoming a bigger risk for businesses in Asia-Pacific as compared to North America and Europe. Rapid growth in connectivity and the accelerating speed of digital transformation makes APAC region, more vulnerable to cyber exploitation. Despite the proliferation of technology and cyber-attacks in this region, there lies significant opportunities for insurers here as APAC’s cyber insurance market share remains negligible.
The first cyber insurance standalone products came out in the India market in 2013, which were mostly driven by the IT sector (Companies such as Infosys, Wipro and TCS) which had to comply with client requirements (largely based out of USA) of taking up the cyber insurance to protect the huge customer data. The market now is slowly shifting towards BFSI sector owing to the compliance requirement by the Reserve Bank of India (RBI). At this point of time, around 30-40 banks in India have taken up the cyber insurance with cover limits ranging from USD 5 million to 150 million. The major companies providing cyber insurance in India are HDFC, ICICI Lombard, Tata AIG and New India Assurance.
Considering South America region, there has been a significant increase in the data breaches affecting businesses in countries such as Brazil and Mexico. In Brazil, the number of cyber-attacks grew by 197% in 2014 and online banking fraud increased by 40%. It has also been testified that nearby USD 3.75 billion has been hacked and stolen since 2012 from a popular payment method used all over Brazil. While cybercrime is a relatively new phenomenon, cyber insurance is rapidly becoming quite sophisticated in the South America with many private companies and government agencies taking concrete steps to combat cybercrime. Furthermore, Middle-East and North Africa spending on the cyber security is anticipated to grow in the coming years, mainly driven by the regulations and increased awareness among the organizations as their needs evolve to address more complex threats.
The global Cyber security insurance market size was valued at USD 3.89 billion in 2017, mainly driven by the increasing number of cyber-attacks across the world. In 2017, the total number of publicly disclosed data breaches around the world were 1,579, each costing on an average USD 3.62 million.
Rapidly increasing connected devices both for personal and business purposes, have created new vulnerabilities which the cyber-attackers can exploit. Cloud computing, which is used for outsourcing services and storage, brings a lot of benefits as well as risks. A single attack on a cloud service provider would result in data breach loss for many. A major cyber-attack involving an energy or utility company would cause a significant outage of power or physical damage in the future. Hence, increasing awareness of exposure to cyber threat and its potential impact on the company’s business, has driven the demand for Cyber security insurance market. According to a study done by Ponemon Institute in 2015, the average cost of a data breach was around USD 3.5 million and is expected to increase in the forecast period. These costs include customer notification cost, the costs of reporting a breach to the regulator, PR costs and other legal expenses. Global strengthening of regulations on loss of personally identifiable information (PII) has fuelled the demand for Cyber security insurance across all the sectors. Especially, the General Data Protection Regulation (GDPR) in the European Union (EU) has increased the interest in cyber insurance across Europe. Companies suffering from data breach would be seeing a fine of 4% of their total global revenue according to this regulation. Hence, a big uptick is seen in terms of organizations buying cyber insurance since last year resulting in overall growth of Cyber security market.
Key Segments of the Global Cyber security Insurance Market
Organization Size Overview, 2015-2025 (USD Million)
- SME
- Mid-market
- Large enterprises
Industry Overview, 2015-2025 (USD Million)
- BFSI
- ICT
- Healthcare
- Manufacturing
- Retail
- Others
Regional Overview, 2015-2025 (USD Million)
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- Rest of Europe
- Asia-Pacific
- India
- China
- Rest of Asia-Pacific
- Rest of the World
Reasons for the study
- The purpose of the study is to give an exhaustive outlook of the global Cyber security insurance industry.
- Rising concerns of data breach events and increasing awareness among various organizations are some of the factors encouraging the adoption of cyber insurance. This prompted us to understand the adoption rates of Cyber security insurance in major target countries
- Cyber security is considered to be one of the top 5 risks by most of the security professionals around the globe across every sector. It is a veritable threat and an opportunity for insurance players to capitalize on. We were curious to understand how the market players are inclined to respond to such an opportunity.
What does the report include?
- The study on the global Cyber security insurance market includes qualitative factors such as drivers, restraints, and opportunities
- Additionally, the market has been evaluated using the Porter’s five forces analysis.
- The study covers qualitative and quantitative analysis of the market segmented on the basis of organization size, industry and region. Moreover, the study provides similar information for the key geographies.
- Actual market sizes and forecasts have been provided for all the above-mentioned segments
- The study includes the profiles of key players in the market with a significant global and/or regional presence
Who should buy this report?
This study is suitable for industry participants and stakeholders in the cyber insurance market. The report will benefit:
- Executives of the cyber insurance companies.
- Managers within financial institutions looking to publish recent and forecasted statistics pertaining to the cyber insurance market.
- Venture capitalist looking into investing capital.
- Government organizations, regulatory authorities, policymakers and financial organizations looking for innovative Cyber security insurance solutions.
- Analysts, researchers, educators, strategy managers, and academic institutions looking for insights into the market to determine future strategies.
Chapter 1 Executive Summary
Chapter 2 Research Methodology
2.1 Research Methodology
2.2 Research Programs/Design
2.3 Market Size Estimation Methodology
2.4 Forecasting
2.5 Scope, definition, and assumptions
2.6 Assumptions
2.7 Data sources
Chapter 3 Market Outlook
3.1 Introduction
3.2 Key trends
3.2.1 Drivers
3.2.1.1 Impact of emerging technologies
3.2.1.2 Rising cost of breach
3.2.1.3 Government regulations
3.2.1.4 Widening demand
3.2.2 Challenges
3.2.3 Opportunities
3.3 Porter’s Five Forces analysis
3.4 Vendor landscape
3.5 Market Investment Proposition, By Geography
Chapter 4 Global Cyber security Insurance Market Overview, by Organization Size
4.1 Global Cyber security insurance market share, by organization size, 2017 & 2025
4.1.1 Small & medium enterprises (SME)
4.1.2 Mid-market
4.1.3 Large enterprises
Chapter 5 Global Cyber security Insurance Market Overview, by Industry Vertical
5.1 Global Cyber security insurance market share, by industry vertical, 2017 & 2025
5.1.1 BFSI
5.1.2 ICT
5.1.3 Healthcare
5.1.4 Manufacturing
5.1.5 Retail
5.1.6 Others
Chapter 6 Global Cyber security insurance Market Overview, by Region
6.1 Global Cyber security insurance market share, by region, 2017 & 2025
6.2 North America
6.2.1 North America Cyber security insurance market, 2015–2025 (USD million)
6.2.2 North America Cyber security insurance market, by organization size, 2015 – 2025 (USD million)
6.2.3 North America Cyber security insurance market, by industry vertical, 2015 – 2025 (USD million)
6.2.4 USA
6.2.4.1 USA Cyber security insurance market, 2015–2025 (USD million)
6.2.4.2 USA Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.2.4.3 USA Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.2.5 Canada
6.2.5.1 Canada Cyber security insurance market, 2015–2025 (USD million)
6.2.5.2 Canada Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.2.5.3 Canada Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.3 Europe
6.3.1 Europe Cyber security insurance market, 2015–2025 (USD million)
6.3.2 Europe Cyber security insurance market, by organization size, 2015 – 2025 (USD million)
6.3.3 Europe Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.3.4 UK
6.3.4.1 UK Cyber security insurance market, 2015–2025 (USD million)
6.3.4.2 UK Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.3.4.3 UK Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.3.5 Germany
6.3.5.1 Germany Cyber security insurance market, 2015–2025 (USD million)
6.3.5.2 Germany Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.3.5.3 Germany Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.3.6 Rest of Europe
6.3.6.1 Rest of Europe Cyber security insurance market, 2015–2025 (USD million)
6.3.6.2 Rest of Europe Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.3.6.3 Rest of Europe Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.4 Asia-Pacific
6.4.1 Asia-Pacific Cyber security insurance market, 2015–2025 (USD million)
6.4.2 Asia-Pacific Cyber security insurance market, by organization size, 2015 – 2025 (USD million)
6.4.3 Asia-Pacific Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.4.4 China
6.4.4.1 China Cyber security insurance market, 2015–2025 (USD million)
6.4.4.2 China Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.4.4.3 China Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.4.5 India
6.4.5.1 India Cyber security insurance market, 2015–2025 (USD million)
6.4.5.2 India Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.4.5.3 India Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.4.6 Rest of Asia-Pacific
6.4.6.1 Rest of APAC Cyber security insurance market, 2015–2025 (USD million)
6.4.6.2 Rest of APAC Cyber security insurance market, by organization size, 2015–2025 (USD million)
6.4.6.3 Rest of APAC Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
6.5 Rest of the world
6.5.1 RoW Cyber security insurance market, 2015–2025 (USD million)
6.5.2 RoW Cyber security insurance market, by organization size, 2015 – 2025 (USD million)
6.5.3 RoW Cyber security insurance market, by industry vertical, 2015–2025 (USD million)
Chapter 7 Company Profiles
7.1 XL Group Ltd.
7.1.1 Company overview
7.1.1.1 Financial Analysis
7.1.1.2 Product portfolio
7.1.1.3 SWOT Analysis
7.1.1.4 Recent Developments
7.2 American International Group, Inc. (AIG)
7.2.1 Company overview
7.2.1.1 Financial Analysis
7.2.1.2 Product portfolio
7.2.1.3 SWOT Analysis
7.2.1.4 Recent Developments
7.3 Zurich Insurance Group AG
7.3.1 Company overview
7.3.1.1 Financial Analysis
7.3.1.2 Product portfolio
7.3.1.3 Recent Developments
7.4 Aon plc
7.4.1 Company overview
7.4.1.1 Financial Analysis
7.4.1.2 Product portfolio
7.4.1.3 Recent Developments
7.5 Travelers Companies Inc.
7.5.1 Company overview
7.5.1.1 Financial Analysis
7.5.1.2 Product portfolio
7.5.1.3 SWOT Analysis
7.5.1.4 Recent Developments
7.6 Munich Re Group
7.6.1 Company overview
7.6.1.1 Financial Analysis
7.6.1.2 Product portfolio
7.6.1.3 Recent Developments
7.7 Beazley plc
7.7.1 Company overview
7.7.1.1 Financial Analysis
7.7.1.2 Product portfolio
7.7.1.3 SWOT Analysis
7.7.1.4 Recent Developments
7.8 CNA Financial Corp
7.8.1 Company overview
7.8.1.1 Financial Analysis
7.8.1.2 Product portfolio
7.8.1.3 SWOT Analysis
7.8.1.4 Recent Developments
7.9 The Chubb Corporation
7.9.1 Company overview
7.9.1.1 Financial Analysis
7.9.1.2 Product portfolio
7.9.1.3 SWOT Analysis
7.9.1.4 Recent Developments
7.10 BCS Insurance Company
7.10.1 Company overview
7.10.2 Product portfolio