The cyber insurance market is set for explosive growth as organizations increasingly seek financial protection against rising cyber threats. This surge in demand reflects a broader shift in how businesses approach risk management, viewing cyber insurance not just as an option but as a necessity.
As the market evolves, insurers and businesses alike must adapt to meet the complex demands of protecting against the financial impacts of cyber incidents. The anticipated growth underscores a shift towards integrating cyber insurance into the core of organizational resilience strategies.
Cyber insurance set for explosive growth
CyberCube | Projecting Cyber Insurance Growth: A 10-Year US Market Outlook | September 2024
- CyberCube has modeled three CAGR factors for the US insurance industry to 2034: 10% growth resulting in $17 billion of premium; 20% growth leading to $45 billion of premium and 30% growth creating $109 billion of US cyber premium.
Companies spend more on cybersecurity but struggle to track expenses
Optiv | 2024 Cybersecurity Threat and Risk Management Report | July 2024
- Only 29% of respondents say their organizations have cybersecurity insurance.
- 49% of respondents say they plan to purchase cybersecurity insurance in the next six months (23%) or in the next year (25%).
- 52% of respondents say it is highly difficult to purchase cybersecurity insurance because of the insurer’s requirements.
26% of organizations lack any form of IT security training
Hornetsecurity | Company IT Security Awareness | June 2024
- 56% of the surveyed organizations now use cyber-insurance, indicating a growing reliance on financial safeguards against cyber incidents.
Cyber insurance isn’t the answer for ransom payments
Veeam | 2024 Ransomware Trends Report | June 2024
- Despite only a minority of organizations possessing a policy to pay, 81% opted to do so.
- 65% paid with insurance and another 21% had insurance but chose to pay without making a claim. This implies that in 2023, 86% of organizations had insurance coverage that could have been utilized for a cyber event.
- Only 62% of the overall impact is in some way reclaimable through insurance or other means, with everything else going against the organization’s bottom-dollar budget.
Human error still perceived as the Achilles’ heel of cybersecurity
Proofpoint | Voice of the CISO Report | May 2024
- 79% of CISOs said they would rely on cyber insurance claims to recover potential losses incurred, compared to 61% in 2023.
Ransomware fallout: 94% experience downtime, 40% face work stoppage
Arctic Wolf | 2024 Arctic Wolf Trends Report | May 2024
- Cyber insurance demand and adoption is widespread, with an exceedingly small fraction (5%) of organizations deciding not to acquire coverage. Of the remaining organizations surveyed, 66% have an active cyber insurance policy, while 29% are in the process of obtaining or planning to obtain a policy this year.
- 53% of survey respondents were most concerned with rising premiums and stricter requirements for maintaining coverage.
- 94% of organizations either currently have or plan to implement adoption and usage policies around generative AI and large language models (LLM) tools this year.
56% of cyber insurance claims originate in the email inbox
Coalition | 2024 Cyber Claims Report | April 2024
- 56% of all 2023 claims were a result of funds transfer fraud (FTF) or business email compromise (BEC), highlighting the importance of email security as a critical aspect of cyber risk management.
- Overall claims frequency increased 13% year-over-year (YoY), and overall claims severity increased 10% YoY, resulting in an average loss of $100,000.
- Claims frequency increased across all revenue bands, with businesses between $25 million and $100 million in revenue seeing the sharpest spike (a 32% YoY increase).