Global Cyber Insurance Market to Surpass $90 Billion by 2033

The global cyber insurance market is poised for rapid growth amid escalating cyberattacks, increasing regulation, the financial toll of attacks and more.

That’s according to Market.Us, which expects the market value to increase from $12.1 billion last year to $90.6 billion by 2033, at a compound annual growth rate of more than 22%.

Top cyber insurance market players include American International Group, Aon, the Chubbs Corp., Zurich Insurance Group, Allianz, Axis Capital Holdings, CNA Financial and more.

Cyber insurance protects businesses and individuals against financial losses and liabilities resulting from cyberattacks, data breaches and other cyber incidents. It helps organizations manage and mitigate risks associated with cyber threats by providing financial compensation for various costs, including data breach response, legal fees, regulatory fines, business interruption and customer notification.

Key Takeaways from Cyber Insurance Report

Key Takeaways from Markets.Us include:

Small-and medium-size enterprises (SMEs) are increasingly recognizing the need for cyber insurance, according to Market.Us. Insurers have an opportunity to cater to the specific requirements of SMEs and offer tailored insurance solutions.

Opportunities in Cyber Insurance

Advancements in technology, such as artificial intelligence (AI) and machine learning (ML), present opportunities for insurers to enhance risk assessment capabilities, streamline underwriting processes and offer more accurate pricing models. These technologies can also help with proactive cyber threat detection and prevention.

In addition, collaborations between cyber insurance providers and cybersecurity firms can combine insurance coverage with proactive risk mitigation and incident response services, according to Markets.Us. Such partnerships offer comprehensive solutions to organizations, increasing the value proposition of cyber insurance.

Delinea's Joseph Carson

Joseph Carson, chief security scientist and advisory CISO at Delinea, said cyber insurance companies are greatly exposed by the increase in successful cyber incidents such as ransomware, and are losing money. In order to ensure they can cover the risks, they need to increase the price.

“In our research on cyber insurance, we found that insurance prices have increased significantly, and that most companies that get cyber insurance ultimately use it and with many using it multiple times,” he said. “The dependency on third-party vendors can significantly impact your cyber risks and, as a result, your insurance premiums. Therefore, you need to ensure you get a good premium, so you must manage your third-party cyber risks. If you manage your risks. then you can significantly reduce the costs and lower your premiums. Taking a pragmatic, risk-based approach and reducing the risks by implementing strong solutions can show an underwriter that you are less likely to become a victim and you will get a lower premium.”

As a result of the introduction of more cyber insurance policies, and ultimately many businesses needing them, the cost of cyber insurance continues to rise at alarming rates and this should continue in 2024, Carson said.

AI, ML in Cyber Insurance

Rajeev Gupta, co-founder and chief product officer at Cowbell, said moving forward, AI and ML will likely play a significant role in both cybersecurity and insurance. AI can be used to detect and respond to cyber threats more effectively, and it can also help insurance companies assess and manage risk more accurately.

Cowbell's Rajeev Gupta

“Advancements in quantum computing may also pose both challenges and opportunities,” he said. “While quantum computing can potentially break current encryption methods, it can also be used to develop more secure encryption algorithms.”

In addition, the increasing connectivity of devices due to IoT will likely create new vulnerabilities, making cybersecurity measures even more critical, Gupta said. As a result, there may be a growing demand for insurance coverage related to IoT security breaches.

Personal cyber insurance is likely to become more relevant as individuals increasingly rely on more technologies in their daily lives, he said.