100% renewal Rates, BFSI & tech sectors lead with 70% market share, business interruptions drive 45% of claims: Policybazaar for Business study

Nearly 100% of cyber insurance clients are renewing their policies. Businesses now recognise the recurring and evolving nature of cyber risks, leading to regular policy renewals. Cyber insurance is no longer seen as an optional risk-transfer tool but as a core component of enterprise risk management.

Companies with turnover over ₹10 Cr leading cyber insurance adoption; BFSI and tech sectors at the forefront

Cyber insurance adoption is concentrated in five key industries, primarily among businesses with annual turnover exceeding ₹10 crore. The breakdown of industry-wise adoption is as follows:

• BFSI (35-40%): The financial sector is the largest consumer of cyber insurance, given its high exposure to financial fraud, data breaches, and regulatory scrutiny.
  
• Technology & IT (30%): IT firms manage vast amounts of customer and enterprise data, making them prime targets for cyberattacks.
  
• Startups (25%): Investor requirements and contractual obligations are key drivers of insurance adoption.
  
• Healthcare (5%): Sensitive patient data and ransomware threats are pushing adoption.
• Logistics (5%): As digital supply chains expand, cyber risks in logistics are increasing.

The dominance of mid-to-large enterprises (₹10+ crore turnover) in cyber insurance adoption highlights that businesses with greater revenue are more proactive in risk management. BFSI and tech sectors lead adoption due to their high regulatory and operational risks, while startups are increasingly purchasing cyber coverage to meet external requirements.

First-time buying companies make up 30-35% of Cyber Insurance clients

A significant 30-35% of businesses purchasing cyber insurance are first-time buyers, showing that awareness is expanding. The trend indicates a shift from reactive to proactive cyber risk management, especially among mid-sized enterprises and startups.

With nearly one-third of buyers being new customers, market penetration is clearly increasing. More and more companies, especially those that previously underestimated cyber risks, are now recognising the financial impact of cyberattacks.

Business Interruption from Data Breaches contribute to 45% of Cyber Insurance claims

Cyber insurance claims data reveals the top reasons for payouts:

The fact that nearly half of all claims (45%) stem from business interruption underscores the increasing importance of cyber insurance as a business continuity safeguard. Companies are not just covering financial losses but also mitigating operational downtime.

Regulatory changes, contractual requirements drive Cyber Insurance growth

Over the past 12-24 months, demand for cyber insurance has grown significantly, driven by:

• Regulatory compliance – Data protection laws and cybersecurity regulations require businesses to enhance cyber resilience.
  
• Contractual requirements – Enterprises, particularly in BFSI and IT, require vendors and partners to hold cyber insurance.
  
• Risk assessments – Companies are proactively assessing their cyber vulnerabilities, leading to increased insurance adoption.
  

Evaa Saiwal, Head of Liability Insurance at Policybazaar For Business says, “The cyber insurance market has evolved from a niche offering to a business necessity in the last couple of years. This demand has been fueled by increasing cyber threats and regulatory compliance. It’s poised for sustained growth, not just among large businesses but also among SMEs and emerging industries. The near-100% renewal rate signals the fact that businesses now see cyber insurance as an indispensable protection tool. Beyond financial recovery, cyber insurance is becoming a key enabler of business continuity, ensuring companies can withstand and recover from attacks with minimal disruption. As threats like ransomware, phishing, and data breaches continue to escalate, integrating cyber risk management and insurance will be key to building a resilient and secure digital ecosystem for businesses.”