Cyber Insurance Market Growth & Performance

Topics: Agent Resources Industry News

Summary: Cyber liability insurance is still a relatively new coverage, gaining increased visibility in the past decade since it was introduced. In this article, learn about the growth of the cyber insurance market and how its coverage can protect small businesses from the impact of the rising issue of cyber attacks.


The cyber insurance market is booming. And with more businesses feeling the effects of data breaches and cyber attacks, the value of cyber insurance’s market share is expected to continue climbing.

The cyber liability insurance market has been growing as more businesses understand the need for protection from financial and reputational losses dues to security breaches and cyber attacks. According to MarketsandMarkets™, the cyber insurance market is projected to continue to grow from $7.8 billion in 2020 to $20.4 billion by 2025, with an annual growth rate of 21.2%.

The cyber liability insurance market may be in its infancy, but it’s one of the industry’s fastest-growing segments and it shows no signs of stopping. Here’s what that means for the insurance industry and agents.

U.S Cyber Insurance Market Growth

Cyber incidents are considered the #1 emerging risk in the near future. And as the cost of these threats increase, the value of insurance premiums will rise with them.

The United States cyber insurance market alone is estimated at up to $3.5 billion annually and is projected to grow by another $2 billion in the next three years.

The data makes it clear: the cyber insurance market is flourishing and growing faster than agents can keep up with.

Agent’s Opportunity to Specialize

Cyber incidents represent a broad, unpredictable risk — especially as new technologies emerge. Data breaches have become a fact of life, and cybersecurity insurance agents have advanced tools at their disposal to help policyholders expand insurance coverage and protect their businesses from the fallout of cyber threats.

For agents, understanding and specializing in cyber insurance adds more value to their customer base since the exposure is growing and difficult to understand. As the cyber industry matures, agents with the most knowledge, expertise and experience in the field will be invaluable.

Cyber Insurance Coverage Varies by Industry

There is no true definition of what cyber insurance includes, since it’s a new field lacking maturity. The coverage will vary depending on the industry, the type of business and their specific needs. That means insureds can expect differences in coverage across providers, even as more cyber policies emerge each year.

One reason for this is a lack of claims data, which drives differences in coverage and makes it difficult to evaluate risk and create predictive models around cyber threats. This poses an interesting challenge to providers — especially with the rapidly changing nature of cyber threats. But as providers sell more cyber policies, they must use claims data they collect to understand the risk of cyber threats and craft better, more comprehensive coverage.

Education for the Insured

Many businesses may not realize they need cyber insurance, or may not understand it. From large corporations to school districts, organizations are getting hit by cyber attacks on a daily basis. Agents can help educate insured about known risks, how cyber losses are compensated and what coverages are available. Businesses may think their other policies – property, liability, business interruption – cover cyber-related incidents, but often policies do not explicitly include or exclude cyber coverage, leaving it in a grey area. The best way a business can protect themselves likely is to have a cyber liability insurance policy.

The Future for Cyber Liability Insurance

Now is an exciting time to enter the cyber insurance game, as most policies and coverage areas are still being defined. It’s a relatively new field within the insurance world, and we’re excited to watch the cyber market develop over the next decade and beyond.

Cyber Liability Insurance Protects Your Business

Cyber liability insurance supports a business’s efforts to recover in the event of a cyberattack. AmTrust’s Cyber Liability insurance provides access to expert resources and financial support through investigation, notification, recovery and post-recovery activities related to a data breach event. Contact us for more information about our cyber liability coverage.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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