With the ever-growing proliferation of the internet & connected devices, along with the mounting adoption of advanced technologies in different end-user verticals, there's been a continuous rise in the number of data breaches & cybercrimes across businesses, particularly after the Covid-19 pandemic. Consequently, enterprises, especially those established in the UAE, are investing excessively in robust cyber insurance policies to safeguard themselves from such incidents.
A recent research study has cited that the UAE Cyber Insurance Market is set to record around 25.6% CAGR between 2023 & 2028. Substantial financial losses being incurred by organizations due to the increasing incidence of cyberattacks and their ever-increasing need to protect sensitive data from ransomware & malware shall drive the industry in the forthcoming years.
Some Major Highlights from the Research Report
SMEs are Increasingly Adopting Standalone Cyber Insurance Plans
Contrary to large enterprises that have massive IT budgets & dedicated digital security teams, small & medium-sized companies are often on low budgets and thus cannot sustain a cyberattack. Here comes the role of standalone policies that provide coverage for both expenses & liabilities and hold the largest share of the cyber insurance industry in the UAE. These policies aid organizations in setting off some of their financial burdens incurred due to such incidents and safeguard them against lawsuits filed due to security or privacy breaches.
Alongside the basic standalone cover, preventative planning, post-breach support, & breach response are additional support services now being offered by some insurance providers. Additionally, these policies further provide coverage of various property exposures like data loss/destruction, business interruption, & funds transfer loss. Therefore, the growing awareness among organizations of the importance & benefits of standalone policies is set to propel the cyber insurance industry expansion in the UAE.
BFSI, Retail, & Healthcare Sectors as the Key End-Users
Banks & other financial firms that comprise customers' confidential information are the most attractive target for attackers. With the increasing monetary operations in these institutions and the growing penetration of mobile banking, the BFSI sector is highly prone to numerous cybersecurity incidents like mass data breaches, heists, & frauds. Hence, to ensure the utmost security of these enterprises and minimize the risk of threats & breaches, the BFSI sector is increasingly adopting cyber insurance policies.
Similarly, with the ever-increasing use of online payments, the retail sector is another prominent end-user of the cyber insurance market in the UAE. More & more retail shops across the country are adopting these solutions to expand their businesses and gain customer trust.
Furthermore, the healthcare sector that exhibits extensive amounts of patient data is also increasingly deploying cyber insurance policies. Digitalization trends in hospitals, clinics, & other such facilities for hassle-free operations have increased their vulnerability to cyberattacks & data fraud. Hence, major healthcare organizations in the UAE are adopting cyber insurance policies to offset their losses and, as a result, aiding in the overall market expansion.
What’s next in the Cyber Insurance Domain?
With the increasing number of business establishments and substantial R&D investments in deploying innovative technologies across industries, the UAE has become a lucrative target for hackers and thus is witnessing rising instances of cyberattacks. The integration of digital technologies into daily operations, heightened risks of data loss, and government mandates have compelled companies, especially those dealing with customers’ personal & financial data, to embrace appropriate security measures. In view of this, cyber insurance providers are conducting rigorous R&D in implementing more effective & innovative solutions to cater to the rising end-user requirements and, consequently, creating new avenues for the industry to witness significant expansion in the coming years.