BFSI sector leads cyber insurance adoption at 35% to 40% share

This was followed by the technology and IT sector at 30%.

Nearly all cyber insurance clients in India are renewing their policies due to the growing recognition of cyber risks, recent study by Policybazaar For Business, revealed.

“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 study also showed a 100% renewal rate, with an annual turnover exceeding ₹10 crore are driving cyber insurance adoption. 

The Banking, Financial Services, and Insurance (BFSI) sector accounts for 35% to 40% of policyholders, followed by the technology and IT sector at 30%. 

Startups make up 25% of adopters, whilst healthcare and logistics each hold a 5% share.

The high adoption rate amongst BFSI and tech firms is attributed to stringent regulatory requirements and heightened exposure to cyber threats.

First-time buyers represent 30% to 35% of cyber insurance clients, signaling a shift towards proactive cyber risk management. 

Many mid-sized enterprises and startups that previously underestimated cyber risks are now recognising the financial and operational impact of cyberattacks.

Business interruption from data breaches accounts for 45% of cyber insurance claims, making it the leading cause of payouts. 

Social engineering attacks contribute to 25% of claims, ransomware incidents to 20%, and other factors to 10%. 

The dominance of business interruption claims highlights the role of cyber insurance in mitigating operational downtime and ensuring business continuity.

The cyber insurance market has expanded significantly over the past two years, driven by regulatory compliance, contractual obligations, and proactive risk assessments. 

Regulatory changes, particularly in data protection and cybersecurity, have prompted more businesses to seek coverage. 

Additionally, companies in BFSI and IT are increasingly requiring vendors and partners to hold cyber insurance as part of their contracts.