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Explore the latest trends and actionable insights on the Cybersecurity market to inform business strategy and pinpoint opportunities and risks

Insurers will Spend $10.6 billion on Cybersecurity by 2025

Industry: Telecom Services
Current: Other Industry Indicators

Cybersecurity revenues in the insurance sector will grow from $6.4 billion in 2020 to $10.6 billion in 2025, according to GlobalData forecasts
The sector’s rapid digital transformation will drive this growth. Cybersecurity software will grow the fastest at a compound annual growth rate (CAGR) of 14.6%, followed by hardware (10.7%) and services (5.5%)
The rise in complex ransomware attacks, the persistence of hybrid working models, ongoing supply chain threats, and the Russia-Ukraine war have all accelerated the need for robust cybersecurity defenses across sectors

As per GlobalData's Cybersecurity in Insurance report, by 2025, the cybersecurity market size in the insurance sector will have reached $10.6 billion. Revenues are expected to grow at a CAGR of 10.7% between 2020 and 2025.

Rapid digitalization and geopolitics have increased cyber risk awareness

COVID-19 led to more customers accessing their accounts digitally and insurers selling through digital channels, increasing the sector’s cyber risk. In 2021, leading financial institutions AXA, Tokio Marine, CNA Financial, and Banco Pichincha were hit by cyberattacks. There are also fears that the Russia-Ukraine war may give rise to state-sponsored attacks that target critical infrastructure, military operations, and businesses. Such attacks could not only target insurers but could lead to expensive payouts and damage the reputations of those reluctant to pay. This was the case for Ace American, which was sued by its client Merck in 2022 for failing to cover its losses during the 2017 NotPetya ransomware attack. The increased risk and fear of cyber attacks was also reflected in the number of mentions of cyber security and cyberattacks both on social media and in insurance company filings. Despite increased awareness and discussion sentiment towards cybersecurity remains negative.

Cybersecurity-related mentions in company filings are steadily increasing, but sentiment remains low. Cybersecurity mentions grew by 93% between 2018 and 2021.

Insurers must navigate the harsh cyber insurance landscape

Although the pandemic accelerated the need for cyber insurance, insurers are yet to translate this into improved penetration rates. As well as an increased demand due to increased cyber risks, the increase in recent cyberattacks resulted in cyber insurance becoming a risky investment which led to higher insurance prices. With insurers such as AXA no longer continuing to write cyber policies that reimbursed ransom attacks and AIG assessing business security measures before underwriting many insurers may follow suit and rethink their risk exposure, forcing businesses to strengthen their cybersecurity frameworks in case of a ransom attack. The increased demand assessing risks associated with cybersecurity policies is also reflected in the sharp increase in the number of active cybersecurity-related active jobs in the insurance sector.

Cybersecurity-related jobs in insurance companies have rapidly increased between Q1 2020 and Q1 2022. The fastest growth, 48%, was between Q4 2020 and Q1 2021, as per GlobalData's Cybersecurity in Insurance report.

Access the report: Cybersecurity in Insurance.

Explore the latest trends and actionable insights on the Cybersecurity market to inform business strategy and pinpoint opportunities and risks Explore the latest trends and actionable insights on the Cybersecurity market to inform business strategy and pinpoint opportunities and risks Visit Report Store