Global cyber insurance market to hit $97.3b by 2032

This is driven by the rising complexity and frequency of cyberattacks.

The global cyber insurance market, valued at $15.3b in 2023, is projected to reach $97.3b by 2032, with a compound annual growth rate (CAGR) of 22.8%, according to an SNS Insider report.

This growth is driven by the rising complexity and frequency of cyberattacks, which have made it critical for businesses to protect themselves against financial harm.

With the increased adoption of digital technologies, organisations are more vulnerable to threats like ransomware, phishing, and data breaches, stressing the need for cybersecurity solutions.

Another key growth factor is the tightening regulatory environment. Laws such as the General Data Protection Regulation in Europe are compelling businesses to strengthen their cyber protections and obtain cyber insurance. 

The International Risk Management Institute reported that over 60% of companies with at least 500 employees now hold cyber insurance policies, reflecting a broader industry trend.

The surge in targeted cyberattacks on critical infrastructure sectors like healthcare, finance, and energy has led insurers to develop sector-specific coverage options, SNS Insider said.

For instance, a 2021 Aon survey revealed that 40% of healthcare organisations saw an increase in cyber insurance claims, largely due to ransomware attacks disrupting operations and compromising patient data.

SNS Insider expects Asia Pacific to see the highest CAGR during the forecast period, driven by rapid digitalisation, increased awareness of cybersecurity risks, and the rising prevalence of cyber threats in countries like India and China.

As countries in the region invest in digital infrastructure and more small and medium-sized enterprises recognise the importance of cyber insurance, the market is poised for significant expansion, it added.

The adoption of artificial intelligence (AI) and machine learning is transforming the cyber insurance industry, enabling insurers to better evaluate risks and implement dynamic pricing models. AI tools allow for real-time tracking of cybersecurity threats, providing insurers with critical insights to improve risk assessment and coverage decisions. 

According to Cyber Insurance Insights, more than 80% of cyber insurance providers used AI in 2024, automating processes such as risk evaluation and claims handling.

Additionally, the proliferation of cloud computing and the Internet of Things is driving demand for cyber insurance as businesses seek to protect their increasingly interconnected systems, SNS Insider noted.