Cyber insurance market set to reach $121b by 2032

APAC is expected to experience significant growth due to rising ransom attacks.

The global cyber insurance market, valued at $16.66b in 2023, is expected to grow significantly, reaching $120.47b by 2032 with a compound annual growth rate (CAGR) of 24.5%, revealed Fortune Business Insights.

This growth is driven by the rising need for businesses to mitigate the risks associated with cyber threats such as data breaches and cyberattacks.

Asia Pacific is expected to experience significant growth due to rising ransom attacks and cyber risks, with countries like Japan (40%), Singapore (30%), Malaysia (25%), and Indonesia (22%) seeing notable increases in cyberattacks in 2021. Europe is also poised for substantial market expansion, driven by changing insurance regulations and the region's digital vulnerabilities. 

As organisations increasingly rely on digital operations, cyber insurance has become essential for protecting against the financial fallout from internet-based attacks that traditional insurance products often do not cover.

The COVID-19 pandemic further accelerated the need for cyber insurance, as remote working and digitalization led to a surge in cyber threats.

Small and medium-sized enterprises (SMEs) are also becoming frequent targets of cybercriminals, prompting these businesses to adopt cyber insurance policies. 

The increasing adoption of crypto insurance services, driven by the growing ownership of cryptocurrencies and the associated risks, is another factor expected to propel market growth.

Despite a volatile risk environment leading to premium hikes, the market saw profitability in 2022, allowing conditions to stabilise in 2023. 

However, coverage restrictions and scrutiny from underwriters continue, particularly concerning AI exposures, data collection, and ransomware threats.