BFSI Sector Drives Cyber Insurance Adoption with 35% to 40% Market Share

Due to the increased awareness of cyber threats, almost all Indian cyber insurance customers are renewing their policies, according to a recent report by Policybazaar for Business.

“This demand has been fueled by increasing cyber threats and regulatory compliance. It’s poised for sustained growth, not just amongst large businesses but also amongst SMEs and emerging industries,” Evaa Saiwal, Head of Liability Insurance at Policybazaar for Business, said in a report.

The survey also revealed that the acceptance of cyber insurance is being driven by a 100% renewal rate and an annual turnover of more than ₹10 crore. 35% to 40% of policyholders are in the Banking, Financial Services, and Insurance (BFSI) sector, with 30% coming from the IT and technology sector.

25% of adopters are startups, with 5% coming from the healthcare and logistics sectors. Strict regulatory requirements and increased vulnerability to cyber risks are the reasons for the high adoption rate among BFSI and tech enterprises.

Thirty to thirty-five percent of cyber insurance customers are first-time purchases, indicating a trend toward proactive cyber risk management. Many startups and mid-sized businesses that once undervalued cyber risks are now realizing the operational and financial consequences of hacks.

Data breach-related business interruption is the primary reason for compensation, accounting for 45% of cyber insurance claims. Ransomware occurrences account for 20% of claims, social engineering attacks for 25%, and other reasons for 10%. The prevalence of claims for business interruption emphasizes how important cyber insurance is for preventing operational outages and guaranteeing business continuity.