In 2016, the size of the global cyber insurance market was valued at $3,416.4 million.
But by 2023, it’s expected to balloon to $16,970 million, after see a compound annual growth rate of 20% in the interim.
That’s according to a report by P&S Market Research that credits loss of brand reputation from cyber attacks as a primary reason cited by “most of the industry leaders” for adopting cyber insurance programs.
Among all industries, banking, financial services and insurance (BFIS) has been the largest consumer for cyber insurance thus far, since they are more prone to cyber attacks, the report says — in fact, contributing more than 35% of the global market share in 2016.
However, going forward, the market will see the fastest growth in retail and manufacturing during the study’s forecast period.
Numerous challenges, risks
Numerous challenges and risks exist, the report points out, such as digital supply chain management and online operations.
The threat of cyber crime is on the rise globally, with the trend of intrusion of unauthorized access entities into critical data and illegitimate access to private and confidential business information also rising.
The “huge loss of enterprise value” due to such incursions is expected to continue, as is the escalation in the adoption of cyber insurance.
According to cyber analysts, individual cyber criminals are uniting into international criminal groups in order to strengthen the impact of their attacks and activities against sensitive and critical business data.
And as interconnectivity, commercialization, and globalization of cyber crime increase, driving greater frequency and severity of cyber incidents, the growth of the cyber insurance market has seen positive impact.
Need for protection
Since a hacker can inflict massive financial loss, corporate embarrassment and business continuity failure on targets ranging from individual companies to government organizations, with high-profile breaches such as the hack of entities from the Democratic National Committee to Twitter and Equifax reinforcing the need for protection and insurance against cyber threats, competitors in the cyber insurance market are investing in new product launches to cater to the larger market and expand their offerings globally.
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