In 2016, the size of the global cyber insurance market wasvalued at $3,416.4 million.

But by 2023, it's expected to balloon to $16,970 million, aftersee a compound annual growth rate of 20% in the interim.

That's according to a report by P&S Market Research thatcredits loss of brand reputation from cyber attacks as a primary reason cited by“most of the industry leaders” for adopting cyber insuranceprograms.

Related: 4 keys to bridging the cyber insurancegap

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 — infact, contributing more than 35% of the global market share in2016.

However, going forward, the market will see the fastest growthin retail and manufacturing during the study's forecast period.

Numerous challenges, risks

Numerous challenges and risks exist, the report points out, suchas 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 intocritical data and illegitimate access to private and confidentialbusiness information also rising.

The “huge loss of enterprise value” due to such incursions isexpected to continue, as is the escalation in the adoption of cyberinsurance.

According to cyber analysts, individual cyber criminals areuniting into international criminal groups in order to strengthenthe impact of their attacks and activities against sensitive andcritical business data.

And as interconnectivity, commercialization, and globalizationof cyber crime increase, driving greater frequency and severity ofcyber incidents, the growth of the cyber insurance market has seenpositive impact.

Need for protection

Since a hacker can inflict massive financial loss, corporate embarrassment and business continuityfailure on targets ranging from individual companies to governmentorganizations, with high-profile breaches such as the hack ofentities from the Democratic National Committee to Twitter andEquifax reinforcing the need for protection andinsurance against cyber threats, competitors in the cyber insurancemarket are investing in new product launches to cater to the largermarket and expand their offerings globally.

Related: Here are 4 fixes to 3 common cybersecurityweaknesses

Marlene Y. Satter has covered the financialindustry since 1997, first for InvestmentAdvisor magazine, then at ThinkAdvisor.com and BenefitsPro.com.Email her at [email protected].