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Cyber insurance - statistics & facts

Cyber insurance is a class of insurance intended to protect both individuals and businesses from internet based risks, such as hacking or other data breaches, as well as losses resulting from problems with IT infrastructure. With the world becoming increasing reliant on digital forms of data storage and communication, cyber insurance is a fast-growing market. Current predictions of the size of the global cyber insurance market suggest rapid growth will occur over the next five years, with the total market size increasing from around eight billion U.S. dollars in 2020 to just over 20 billion U.S. dollars by 2025. The vast majority of the market is for corporate insurance. For example, the United States market for personal cyber insurance comprises less than a quarter of the overall cyber premiums written in the U.S.

Distribution of claims

By far the most common type of cyber insurance claim is for security breaches, comprising almost three quarters of the types of cyber insurance claims made worldwide between 2013 and 2019. By contrast, privacy breaches resulting from other causes, and losses from business interruption constituted a very small share of the overall claims made during this period, at below 10 and five percent respectively. Globally, the industry with the highest share of cyber insurance claims over this period was healthcare, followed by IT/telecommunications and insurance.

Need for cyber insurance

Even with the forecasted growth of the industry, many experts worry this may not be enough given the increasing prevalence and cost of cyber-crime. For example, the number of annual data breaches in the United States has increased more than threefold since 2012, while the average cost of a data breach to U.S. businesses has increased by around 60 percent. Despite this increased risk of losses from cyber risks, over a quarter of businesses in the U.S. and Europe have no plans to implement cyber insurance.

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