Cyber Insurance Set For Rapid Growth
Increased risk and regulations are driving the rapid rise in cyber insurance
Increased risk and regulations are driving the rapid rise in cyber insurance.
According to a report by market research company SNS Insider, the cyber insurance market size was valued at USD 15.3 billion in 2023 and is expected to grow to USD 97.3 billion by 2032. In an interconnected digital world, this impact will also be felt in Australia.
Global landscape
SNS Insider stated that North America dominated the cyber insurance market and represented a significant revenue share in 2023 due to the increasing number of cyberattacks, data protection regulations such as the General Data Protection Regulation, and industry standards in finance and health. These changes in the landscape meant that businesses were implementing increased levels of cyber protection and cyber insurance.
Cyber security is also becoming top-of-mind for businesses in the Asia-Pacific region with the growing prevalence of cybercrimes, increased cyber threats associated with developing nations such as India and China, and the growing trend of data protection regulations.
What's ahead for Australia
Australia is likely to follow the global growth trend in cyber insurance as many companies, both large and SMEs, adopt insurance solutions as a proactive risk management tool to address escalating cyber threats and data breaches to safeguard against potential financial losses and reputational damage.
Currently, Australia is facing a threat of underinsurance regarding cyber risk, with only about 20% of SMEs and 35-70% of larger businesses having standalone cyber insurance.
Meanwhile, as per a recent November report, Rachel Turk, Lloyd's Chief Underwriting Officer, highlighted that cyber is the fastest-growing business class at Lloyd's, with over a fifth of the global cyber reinsurance being placed there. Patrick Tiernan, Lloyd's Chief of Markets, also reinforced the massive growth of cyber in his Keynote Address as the international guest speaker at the 2023 NIBA Convention.
A growth segment will also be the development of sector-specific coverage to combat increasing cyber-attacks on high-risk essential infrastructure sectors such as healthcare, finance, and energy.