The global cyber insurance market registered significant growth in 2020 and 2021, primarily due to substantially increased premiums. The increased frequency and severity of cyberattacks, coupled with the global shift to remote working in the wake of the pandemic, prompted insurers to raise prices.
Also Read: Cybersecurity Resilience in the Pandemic-Stricken Digital Era
Against this backdrop, the global cyber insurance market is forecast to grow from $16.7 billion in direct written premiums (DWP) in 2022 to $33.4 billion in 2027, according to GlobalData.
In its latest report, Thematic Intelligence: Cyber Insurance 2023,” GlobalData reveals that even with waning demand (largely due to rapid premium price increases), global DWP in the market grew healthily in 2021 (66.5%) and 2022 (42.7%).
Benjamin Hatton, insurance analyst at GlobalData, comments: “As premiums gradually soften going into the second half of 2023 and beyond, and as economic conditions become less burdensome on businesses, demand for cyber insurance should grow going forward. Greater levels of cybersecurity, lower tendencies to pay ransom demands, war exclusions, and a more competitive insurance landscape will all coalesce to keep a lid on prices going forward. This is expected to gradually encourage greater uptake of policies in both personal and commercial spaces, leading to a persistently strong market growth rate over the period.”
Global cyber risks continue to pose a threat to businesses after the pandemic, with many UK SMEs acknowledging that their cyber risks have increased. According to GlobalData’s 2022 UK SME Insurance Survey, nearly 50% of medium-sized enterprises have experienced increased cyber risk since the start of COVID-19.
Also Read: On the World Wide Web, It’s a Must to Be Cyber Smart
Hatton concludes: “The tough economic climate may be holding some businesses back from buying cyber cover right now, but as economies return to growth, the cyber line looks set to receive strong demand going forward.”