Cyber Insurance Statistics By Market Size and Facts

Introduction

Cyber Insurance Statistics: Cyber insurance is a type of coverage that protects people and businesses from financial losses caused by cyberattacks and data breaches. In today’s connected world, where threats like hacking, malware, and ransomware are common, having cyber insurance is very important. This insurance helps cover costs from data breaches, ransomware attacks, and business interruptions.

It also helps with issues like cyber extortion, recovering lost data, legal claims, fines, and handling emergencies. The details of the coverage and prices can vary, but cyber insurance is an essential part of managing risk, especially as cyber threats continue to change.

It helps companies bounce back quickly and reduces the financial and reputational damage caused by cyber incidents. We shall shed more light on the Cyber Insurance Statistics through this article.

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• Chubb Ltd Group is one of the biggest insurance companies, with $404,144,104 in premiums and a 14.7% share of the market.
• In 2023, there were 1,153 cyber insurance claims due to business email scams.
• Cyber Insurance Statistics stated that the global market for cybersecurity insurance was valued at $7.60 billion in 2021 and is expected to grow to $20.43 billion by 2027.
• In the US, the cybersecurity insurance market was worth $2.38 billion in 2020.
• Cyber Insurance Statistics stated that around 27% of data breach claims and 24% of first-party claims had exclusions in the policy that led to partial or no payouts.
• According to a 2024 survey, only 19% of businesses said they have coverage for cyber events over $600,000. Only 55% of organizations reported having any cybersecurity insurance.
• In the last 3 years, cyber insurance claims have increased by 100%, and payouts have risen by 200%, with a peak of 8,100 claims in 2021.
• Cyber Insurance Statistics stated that around 99% of all cybersecurity insurance claims come from small and medium-sized businesses (SMEs) that have annual revenue under $2 billion.
• The average cybersecurity insurance claim for a small to medium enterprise (SME) is $345,000. For a ransomware event, the average claim is $485,000. For all organizations, the average claim is $812,360.

What is Cyber Insurance and its Importance?

Cybersecurity insurance, also known as cyber insurance, helps businesses protect themselves from the risks of cybercrimes like hacking and data breaches. It covers the costs of internet-related threats that can affect a company’s IT systems and data management, which regular business insurance usually doesn’t cover.

Just like businesses buy insurance for physical damage or natural disasters, cyber insurance helps pay for the losses caused by a cyberattack.

Cyber insurance is becoming more important for businesses as the risk of cyberattacks on apps, devices, networks, and users keeps growing. If data is stolen or lost, it can seriously hurt a business, leading to lost customers, a damaged reputation, and lost revenue.

Businesses can also be held responsible for losing or having third-party data stolen. Cyber insurance can protect companies from cyber events, like cyber terrorism, and help them recover from security problems.

What Risks Does Cyber Insurance Cover?

Cybersecurity insurance helps businesses cover costs when they face cyberattacks, like hacking, data theft, or ransomware. It can also pay for legal fees and other related expenses. While coverage can differ, here’s what cyber insurance usually covers:

• Customer notifications: If there’s a data breach, businesses must inform their customers, especially if their info is compromised. Cyber insurance can help pay for this process.
• Identity recovery: If customers’ personal information is stolen, cyber insurance can help businesses restore their identities.
• Data breaches: These occur when personal information is accessed or stolen without permission.
• Data recovery: Cyber insurance can help pay to recover lost or damaged data after an attack.
• System repair: If a cyberattack harms computer systems, the insurance can cover the repair costs.
• Ransom payments: If a ransom is demanded in a cyberattack, cyber insurance can help pay it. However, experts usually advise against paying, as it encourages criminal activity.
• Fixing the damage: Cyber insurance helps cover legal fees for violating privacy rules and can pay for experts to recover stolen data or fix damages caused by the attack.
• Liability for partner losses: If a business partner loses data or suffers due to a cyberattack, the insurance can cover the costs.

General Cyber Insurance Claims Statistics

• Cyber Insurance Statistics stated that 66% of people in the US are aware of cyber insurance. The main reasons people don’t have it are needing more research (40%) and the high cost (34%).
• For data breach claims, 71% of the loss is covered by cyber insurance. Of that, the insurance company pays 44%, and 27% is covered by the insured business with retention.
• Looking at the costs of a data breach claim, 21% goes toward forensic investigation, 18% to defense costs, 13% for legal advice and cybersecurity experts, and 14% is spent on credit and theft monitoring services.
• In 2% of cyber claims, the total cost of a breach exceeded $100 million.
• Cyber Insurance Statistics stated that two common reasons for not triggering insurance coverage are using unapproved vendors or doing activities without the insurer’s consent.

(Source: getastra.com)

For healthcare-related claims, the causes include:

1. Malicious data breaches: 18%
2. Accidental data breaches: 29%
3. Ransomware: 8%
4. Stolen or lost devices: 16%

For IT and communications companies, the causes of claims are:

1. Malicious data breaches: 24%
2. Accidental data breaches: 18%
3. Ransomware: 11%
4. Social engineering: 10%

For the insurance sector, the main claim causes are:

1. Malicious data breaches: 39%
2. Accidental data breaches: 35%
3. Ransomware: 4%
4. Social engineering: 7%

For retail and wholesale businesses, the main causes of claims are:

1. Malicious data breaches: 30%
2. Social engineering: 11%
3. Accidental data breaches: 8%

In the manufacturing sector, the main claim causes are:

1. Malicious data breaches: 22%
2. Social engineering: 30%
3. Ransomware: 9%

• Cyber Insurance Statistics stated that Ransomware claims have increased by 20%, and the severity of these claims is up by 10%. Small businesses have seen a 40% rise in ransomware attacks and a 56% increase in fraud involving fund transfers.
• Companies with revenue between $25 million and $100 million had a 68% increase in claims, while businesses earning less than $25 million saw a 21% rise.
• Similarly, small businesses using SonicWall’s VPN appliance saw a 123% rise in claims due to a vulnerability that caused major losses.
• Mid-sized businesses with revenue between $25 million and $100 million had a 44% increase in cyber claims.
• Premiums for standalone cyber insurance increased by 92%, totaling $3.1 billion.
• The average cost of a ransomware claim is about $485k.
• Cyber Insurance Statistics stated that 40% of companies bought cyber insurance after another business in their industry experienced a cyberattack.
• Another 40% bought insurance after a cybersecurity risk assessment, and the remaining 20% did so for other reasons.
• A study showed ransomware was the main cause of loss in nearly 6,000 cyber insurance claims, with the average ransom demand reaching $247,000 and the total cost per incident reaching $352,000.

Factors Driving Cyber Insurance Purchase

(Reference: news.sophos.com)

Cyber Insurance Pricing Trends for Communication, Media, and Technology Companies

• The cyber insurance market is changing significantly, with higher premiums, less available coverage, and stricter rules. These changes have helped insurance companies become more profitable.
• Cyber Insurance Statistics stated that some clients in India have chosen to increase their coverage limits, while a smaller number have reduced their self-insurance amounts.
• The increase in cyberattacks, especially ransomware and supply chain issues, has caused insurance companies to pay out more on claims.
• This has led them to raise their standards for approving policies.
• Reinsurance costs have gone up due to the rise in cyber incidents, which has made premiums higher for customers.
• Along with this, more government regulations are making insurers more careful, which reduces available coverage and pushes up costs.

(Reference: scoop.market.us)

• As a result, insurers are being pickier about who they cover and are requiring businesses to have better cybersecurity in place. This makes it harder or more expensive for companies with weak cybersecurity to get insurance.
• Cyber Insurance Statistics stated that many insurers are also leaving the market or offering less coverage, making it tough for businesses, especially larger ones, to find the right coverage.
• To deal with these changes, businesses are focusing more on managing their cyber risks and improving their cybersecurity.
• Some are also looking at alternative ways to handle their cyber risks rather than relying solely on traditional insurance.

Cyber Insurance Claims Statistics

• The biggest cause of cyber insurance claims is ransomware, which makes up 29% of all reported incidents. This shows how common and damaging ransomware attacks are.
• Other unknown reasons account for 17% of claims, showing the variety of issues that can lead to claims.
• Business Email Compromise (BEC) is also a major contributor, making up 15% of claims. This shows the risks businesses face from email-related attacks.
• Hackers, including different types of cyberattacks, cause 12% of claims, highlighting the ongoing threat from malicious attackers.
• Unspecified incidents, which might include unexpected cyber events, account for 7% of claims, showing how complex cyber risks can be.
• Mistakes made by staff or human error are responsible for 4% of claims. This shows why employee training and awareness are important for cybersecurity.
• Cyber Insurance Statistics stated that Phishing attacks make up 4% of claims, showing that this common threat is still a problem.
• Money theft, usually through financial cybercrimes, accounts for 3% of claims.
• Malware and viruses are behind 3% of claims, showing that these threats are still persistent.

(Reference: scoop.market.us)

• Legal actions caused by cyber incidents make up 2% of claims, highlighting the legal risks that can come from cyber events.
• Privacy breaches, which can lead to important legal issues, account for 2% of claims.
• Finally, actions taken by rogue employees make up 2% of claims, showing the importance of having good internal controls and monitoring to prevent threats from inside the company.

Cyber Insurance Market Statistics

• Cyber Insurance Statistics stated that the global cyber insurance market was worth $14 billion in 2023 and is predicted to grow to about $29 billion by 2027
• This shows a lot of growth potential. The market is expanding due to increased awareness of the growing number and complexity of cyberattacks and the financial damage they can cause.
• Stricter rules, like the Network and Information Security Directive (NIS2), which will take effect in October 2024, are also boosting this growth.
• NIS2 aims to improve cybersecurity and resilience in Europe.
• Other reasons for growth include the ongoing digital changes in industries and the need for businesses to meet certain security standards with partners in the supply chain.
• This trend shows how important cyber insurance has become as a vital part of managing cybersecurity risks.

(Source: munichre.com)

• The cyber insurance market has almost tripled in size over the last five years. This growth is largely due to strong support from reinsurers and growing, though still limited, interest from the capital markets in cyber risks.
• However, only a small portion of these risks are currently covered.
• Large companies continue to pay most of the premiums, while small and medium-sized businesses handle most of their cyber risks.
• Cyber Insurance Statistics stated that Insurers face a big challenge in closing the gap between actual losses and those covered by insurance.
• With cyber risks rapidly increasing in the digital world, improving cyber insurance coverage is a top goal.
• By helping protect the digital world, insurers can show their importance to the economy and society’s stability.
• The insurance industry offers many solutions that continue to attract businesses without coverage, but it’s important to ensure the coverage is adequate and long-lasting.

Cyber Insurance Regional Statistics

• The market is analyzed by country, type, deployment, and end-user, providing details on market size and volume.

(Reference: news.sophos.com)

• North America leads the market, thanks to large investments in research and development (R&D) from the IT and communication sectors, as well as fast technological advancements.
• The region also benefits from good regulations, growing customer expectations, and strong market competition, which all contribute to North America’s dominance in the OT security market.

(Source: thebusinessresearchcompany.com)

• Cyber Insurance Statistics stated that Asia-Pacific is expected to grow quickly due to the region’s growing industries and many manufacturing companies.
• As a result, there’s a greater need for better threat detection and prevention.
• Businesses are also focusing more on improving security, driving the demand for advanced security solutions.

Recent Cyber Insurance Statistics

• The global cyber insurance market is expected to grow to around $29 billion by 2027, up from $14 billion in 2023. This growth is driven by more awareness of cyber risks and a higher demand for insurance coverage.
• The market has nearly tripled in size over the past five years. In 2023, the demand for cyber insurance has increased due to the growing complexity of cyber threats, including the rise in digital activity during the COVID-19 pandemic, which made businesses more vulnerable to cyberattacks.
• Cyber insurance helps businesses cover costs related to responding to and recovering from cyberattacks, and these expenses are rising.

(Reference: spyhunter.com)

• Small businesses typically pay about $145 per month for cyber insurance, with yearly premiums ranging between $1,000 and $7,500, depending on several factors.
• Premiums for cyber insurance increased by almost 80% in 2022 but are expected to stabilize in 2025 and 2026.
• The cost of cyber insurance depends on the type of business; sectors like healthcare and finance, which face more risks, pay higher premiums.
• Larger businesses dealing with more sensitive data also have higher insurance costs.
• Cyber Insurance Statistics stated that businesses with strong cybersecurity measures may see lower premiums, and those with a clean claims history may pay less.
• On the other hand, companies with previous claims will likely face higher rates. The cost of cyber insurance is also affected by policy limits and deductibles.
• Industries like healthcare, IT, and communications had the highest number of claims triggered by cyber incidents.

(Reference: spyhunter.com)

• Many claims are caused by business interruptions from cyber issues, with data breaches leading to the largest financial losses.
• Cyber insurance can cover the costs of restoring data, repairing systems, and investigating breaches. Legal help to manage fees and comply with regulations is often included in policies, along with risk assessment services.
• Having cyber insurance gives businesses peace of mind during a cyberattack and is a vital part of managing cybersecurity risks.
• Companies dealing with sensitive data should strongly consider getting cyber insurance, especially since more than half (56%) of claims come from small businesses.
• Businesses without strong cybersecurity measures are more likely to face higher insurance costs.
• Malware attacks, which often steal money or demand large ransoms, continue to rise. Additionally, 77% of companies are not ready for a cyberattack, and small businesses with fewer than 100 employees face 350% more risk from social engineering attacks.
• Human mistakes are behind 95% of cybersecurity issues, and phishing makes up 83% of reported incidents.
• Training employees properly can significantly reduce mistakes and liability claims, and having an incident response plan can minimize the damage caused by a cyberattack.
• Small businesses are still major targets, as 56% of cyber insurance claims come from them.

Conclusion

In summary, cyber insurance is becoming more important as businesses face an increase in cyber threats. The market is expected to grow a lot in the next few years, and small businesses are realizing the need for protection against things like data breaches and ransomware attacks. Premium costs are rising, especially for businesses in high-risk industries, showing how important it is to have strong security measures in place. Companies with good security practices and no past claims can lower their insurance costs.

As technology keeps changing, cyber insurance will be essential for businesses to manage their cyber risks and protect their finances. We have shed enough light on Cyber Insurance Statistics through this article.