Insurance

North American cyber to account for more than half of market growth – report

Oct 31, 2023 2 years ago

Segment expected to experience a double-digit surge between 2022 and 2027

By Kenneth Araullo

Oct 31, 2023 Share

The global cyber insurance market is set to witness substantial growth, estimated at $42.81 billion from 2022 to 2027, with North America expected to spearhead this growth, accounting for 57% during the forecast period.

According to the latest report from the research and advisory firm Technavio, the market’s projected expansion indicates a compound annual growth rate (CAGR) of 35.92% during the forecast period. The surge in awareness of cyber insurance among individuals and businesses is a key driver bolstering the regional market.

Additionally, the high adoption of technologies, the upsurge in online transactions, and the expansion of the e-commerce sector are further catalysts propelling the cyber insurance market in North America. The report noted key vendors such as Aon, At-Bay, AXA, and Beazley as entities that offer cyber coverage and integral players in the market’s continued expansion.

Challenges that will impede growth in the cyber sector

The report identifies a lack of standardization as a significant challenge impeding market growth. The absence of clear and uniform cyber insurance policy coverage terms leads to exclusions and limitations, creating gaps that leave end-users exposed to potential financial losses.

Furthermore, the absence of standardized guidelines complicates risk assessment for insurance companies and affects their ability to ascertain appropriate coverage levels.

With that in mind, the forecast predicts significant growth within the large enterprises segment. This sector, being at a higher risk of cyberattacks, is increasingly adopting cyber insurance to mitigate the financial impact of security breaches.

The heightened demand from large enterprises has spurred vendors to tailor packages that meet their specific needs, including increased coverage limits, comprehensive services, specialized support, and global coverage. These tailored solutions cater to the distinct needs of large enterprises and contribute substantially to the segment’s growth within the cyber insurance market.

Elsewhere in cyber insurance, Allianz Commercial has issued a report warning of a concerning resurgence in ransomware and extortion claims in 2023.

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