Cyber insurance is a specialty insurance product that covers business liabilities for internet-based risks involving sensitive customer information and helps organizations reduce the chances of business disruption during attacks & their aftermath. As cybercrimes are becoming a significant concern of businesses irrespective of their sizes & locations, many organizations worldwide are deploying adequate cyber insurance policies to protect themselves against such incidents. With the growing number of cyber threats that are volatile in nature and require a high amount of focus & time, the cyber insurance industry is witnessing profitable prospects across different countries worldwide, especially in the UAE.
The UAE Cyber Insurance Market is anticipated to grow at a CAGR of around 25.6% during the forecast period, i.e., 2023-28. Most of the market expansion would be propelled by the increasing incidence of cyberattacks among organizations, resulting in massive financial losses, coupled with ever-increasing requirements of enterprises to protect sensitive data from ransomware & malware. Besides, the increasing adoption of advanced technologies like the IoT, AI, etc., coupled with technological advancements like next-generation as well as integrated security solutions and the rapid transition of businesses to cloud-based models, are other prominent aspects projected to stimulate the market expansion through 2028.
|Study Period||Historical Data: 2018-21|
|Base Year: 2022|
|Forecast Period: 2022-28|
|Key Companies Profiled||Lloyd, Berkshire Hathaway, AXA, Allianz, Assicurazioni Generali, Munich Re, Cyence, PolicyGenius, Safeshare|
|Unit Denominations||USD Million/Billion|
Digitalization trends in various industries have resulted in significant challenges associated with digital security management. Consequently, managing online risks has become one of the most crucial operations for any business to protect their data from digital frauds, cybercrimes, & data breaches. Cyber insurance provides financial protection to policyholders against any internet-based incident. It involves first-party coverage from losses arising due to hacking, extortion, breaches, data destruction, and denial-of-service attacks. Considering these benefits, the UAE is witnessing an increasing number of organizations opting for these solutions, i.e., stimulating the expansion of the Cyber Insurance Market.
Latest Trend in the UAE Cyber Insurance Market
Blockchain technology offers quick results, transparency, better efficiency, & real-time fraud mitigation. On the other hand, artificial intelligence helps enhance the efficiency of insurance brokers & accurately predict cyberattacks. As a result, these technologies are being integrated into cyber insurance solutions in order to deliver tailored coverage with accurate threat analysis, reduced chances of fraud, automated compliance, and improved customer experience, thereby creating new prospects for the leading companies operating in the UAE Cyber Insurance Market to introduce new insurance business models and yield significant profits in the coming years.
Based on Insurance Type:
Of both, standalone policies hold a notable share of the UAE Cyber Insurance Market. It owes to their mounting adoption by SMEs that face an ever-increasing risk of cyberattacks, and unlike large enterprises that have dedicated security teams & massive IT budgets, SMEs have low budgets and are often not fully prepared to withstand a cyber-assault. Standalone cyber insurance provides coverage for both expenses & liabilities. It helps organizations offset some of the financial burdens of these incidents and offers them protection against lawsuits filed due to security or privacy breaches and containing allegations of failure to safeguard sensitive information.
Nowadays, most insurance providers, alongside basic standalone coverage, have also started providing various support services, including preventative planning, post-breach support, and breach response services. Moreover, standalone cyber insurance policies also cover different property exposures like business interruption, data loss/destruction, & funds transfer loss. Hence, with these benefits, the surging demand for standalone policies, especially in SMEs, is propelling the growth of the UAE Cyber Insurance Market.
By Organization Size:
Here, large enterprises account for the largest share in the UAE Cyber Insurance Market since they have a large volume of critical data stored in clouds & other storage areas. The rapid adoption of advanced technologies like Artificial Intelligence & the Cloud among large enterprises is another crucial aspect that makes them more vulnerable to cyber threats. Besides, large enterprises can invest easily & substantially in cyber insurance policies to reduce risks associated with cyberattacks.
On the other hand, Small and Medium-Sized Businesses are also adopting several technologies to improve their business efficiency, i.e., increasing risks of cyber-attacks among these organizations. Companies belonging to this group do not have proper security infrastructure that makes them more prone to cyberattacks. Hence, the adoption of cyber insurance among small & medium-sized enterprises is projected to increase dramatically in the forecast period.
Of all end-users, the BFSI sector holds the largest share of the UAE Cyber Insurance Market. It owes to the increasing monetary operations in banks & other financial institutions. The BFSI sector comprises customers' confidential data, owing to which it is the most attractive target for hackers. In addition, the rising adoption of mobile applications & internet banking makes it more subjected to a large number of cybersecurity incidents, such as large-scale breaches, frauds, & heists. The security of banking & financial services is very crucial since it is considered the backbone of any nation's economy. Hence, to reduce the risk of threats & breaches, the need for adopting cyber insurance in the BFSI sector is increasing significantly.
On the other front, the demand for cyber insurance is also increasing across the retail sector, mainly due to the ever-increasing use of online payments in the industry. Adopting cyber insurance shall help retail shops expand their businesses and gain customer trust. Furthermore, the healthcare industry is projected to witness robust market growth in the coming years since it is a reservoir of extensive amounts of patient data. The rapid digitalization in UAE's healthcare sector for easy access has increased its vulnerability to online threats. As a result, it is becoming a significant target for hackers. Hence, in the wake of increasing cyberattacks, healthcare organizations are expected to adopt cyber insurance solutions in the coming years to offset their losses.
Of all regions in the UAE, Dubai dominates the Cyber Insurance Market, mainly due to the increasing establishment of businesses within the region. Besides, economic growth across Dubai is encouraging substantial investments in the Research & Development (R&D) activities and mounting focus on developing modern technologies.
Furthermore, the burgeoning number of cyberattacks, integration of digital technologies into day-to-day tasks, and the high risk of data loss are other crucial aspects projected to fuel the demand for cyber insurance in Dubai. Moreover, the Covid-19 pandemic has also positively influenced the overall market growth in Dubai owing to the rising trend of Work-from-Home policies and the high usage of internet connectivity.
Key Driver: Increasing Instances of Cyberattacks & Data Breaches in the UAE
The rapid digitalization in businesses across the UAE has resulted in an astronomical surge in the incidences of data breaches & cybercrimes. Many sectors like BFSI, retail, and healthcare are becoming the most attractive target for attackers due to the large volume of sensitive customer data within these sectors. Additionally, the increasing adoption of online shopping, mobile banking, Electronic Medical Records (EMRs) is another crucial aspect that proliferates the risk of data breaches in these industries. Hence, the increasing number of cybercrimes is likely to propel the demand for cyber insurance in the year to come.
Growth Restraint: Expensive Premiums of Cyber Insurance Policies
With the burgeoning number of cybercrimes & data breaches, the need for adopting cyber insurance is growing astronomically across the UAE. However, the high costs of cyber insurance policies might hinder the growth of the market in the coming years. The premium prices of cyber insurance solutions are only affordable to large-sized enterprises since they can invest significant amounts for their data security. Also, large enterprises have to deal with an extensive volume of data that requires protection against any attack. As a result, the premium prices of cyber insurance make it difficult for small-sized businesses to afford these policies.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The UAE Cyber Insurance Market is forecast to grow at a CAGR of around 25.6% during 2023-28.
A. Increasing threats of cybercrimes & data breaches are the key factors projected to drive the UAE Cyber Insurance Market during 2023-28.
A. Lloyd, Berkshire Hathaway, AXA, Allianz, Assicurazioni Generali, Munich Re, Cyence, PolicyGenius, and Safeshare are the key companies operating in the UAE Cyber Insurance Market.
A. The BFSI sector holds the largest share of the UAE Cyber Insurance Market and is projected to create lucrative growth opportunities for the leading market players in the coming years.
A. In the UAE, Dubai would generate lucrative prospects for the Cyber Insurance Market over the coming years.