Cybercrimes & cyberattacks are becoming a significant concern of businesses irrespective of their sizes & locations. Due to this, many organizations are actively adopting cyber insurance policies to protect themselves against cyber incidents. The cyber insurance industry has evolved substantially with the growing number of cyber threats that require a high amount of focus & time.
This evolution has been driven primarily by the volatile nature of cyber risks. Cyber insurance covers business liabilities involving sensitive customer information for data breaches. It protects an organization’s data & finances from any cyberattacks & threats. Through cyber insurance, businesses can reduce the chances of massive disruption during attacks & their aftermath.
The UAE Cyber Insurance Market is anticipated to grow at a CAGR of around 25.6% during the forecast period, i.e., 2021-26. The growth of the market is driven primarily by the snowballing number of cyberattacks among organizations, resulting in massive financial losses, coupled with the mounting need to protect crucial data from threats like ransomware & malware.
Besides, the increasing adoption of advanced technologies like the IoT, AI, etc., is another critical aspect projected to offer lucrative growth opportunities to the market during 2021-26. Additionally, technological advancements like next-generation security solutions & integrated security solutions and the surging number of businesses transferring their core data to the cloud also propel the need for cyber insurance to protect them from data loss in the coming years.
Furthermore, rapid digitalization within businesses has resulted in various challenges related to the management of privacy & digital security. Managing online risks is becoming one of the most important parts of any business to protect their data from digital frauds, cybercrimes, & data thefts. Cyber insurance provides financial protection to policyholders against any cyber incident. It involves first-party coverage from losses suffered due to hacking, extortion, breaches, data destruction, and denial-of-service attacks. However, high costs associated with cyber insurance might hinder the market growth during 2021-26.
|Study Period||Historical Data: 2016-19|
|Base Year: 2020|
|Forecast Period: 2021-26|
|Key Companies Profiled||Lloyd, Berkshire Hathaway, AXA, Allianz, Assicurazioni Generali, Munich Re, Cyence, PolicyGenius, Safeshare|
|Unit Denominations||USD Million/Billion|
Impact of Covid-19 on the UAE Cyber Insurance Market
In 2020, the Covid-19 pandemic adversely impacted several businesses across the UAE. To follow lockdown measures & social distancing protocols, many organizations adopted Work-from-Home policies amidst the crisis. These remote working arrangements resulted in numerous vulnerabilities within organizations' security, owing to increased risks of cyber-attacks since the maximum number of employees have used unprotected networks. Hence, the growing adoption of virtual working space amidst the pandemic significantly propelled the need for cyber insurance.
During the pandemic, many schools & other communities shifted their operations online. Thus, the rise in the adoption of online communication platforms for conferencing & delivering classes has surged risks of cyberattacks & hacking. With the mounting adoption of BYOD devices, work from home trend, and increasing internet penetration across the corners of the UAE, individuals gradually inclined toward using digital technologies, which, in turn, fueled the requirement for cyber insurance policies for protection against the aftermath of cyber-attacks. Cyber insurance policy allows businesses to ensure their continuity & maintain their security from cybercrimes & malicious threats.