As of 2024, the average cost of a data breach in the financial industry worldwide was **** million U.S. dollars, up from **** U.S. dollars in 2024. The global average cost of a data breach across all studied industries was **** million U.S. dollars.

Between 2008 and 2024, the most significant data breach in the financial industry worldwide was detected in 2019 in the United States at the First American Financial Corporation. This data breach caused the leakage of *** million financial and personal records. The financial industry is one of the most targeted sectors by cyberattacks that lead to data breaches. However, cyber-attacks are not the only reason for a data breach. Sometimes data compromise occurs due to other reasons, such as system errors.

In 2023, the number of data compromises in the financial services industry in the United States reached 744, up from 138 such incidents in 2020. The financial services sector was the second-most targeted industry by cyber security incidents resulting in data compromise. The number of data compromises includes data breaches, as well as exposure and leakage of private data.

During the second quarter of 2025, data breaches exposed more than ** million records worldwide. Since the first quarter of 2020, the highest number of data records were exposed in the third quarter of ****, more than *** billion data sets. Data breaches remain among the biggest concerns of company leaders worldwide. The most common causes of sensitive information loss were operating system vulnerabilities on endpoint devices. Which industries see the most data breaches? Meanwhile, certain conditions make some industry sectors more prone to data breaches than others. According to the latest observations, the public administration experienced the highest number of data breaches between 2021 and 2022. The industry saw *** reported data breach incidents with confirmed data loss. The second were financial institutions, with *** data breach cases, followed by healthcare providers. Data breach cost Data breach incidents have various consequences, the most common impact being financial losses and business disruptions. As of 2023, the average data breach cost across businesses worldwide was **** million U.S. dollars. Meanwhile, a leaked data record cost about *** U.S. dollars. The United States saw the highest average breach cost globally, at **** million U.S. dollars.

In this document, comprehensive datasets are presented to advance research on information security breaches. The datasets include data on disclosed information security breaches affecting S&P500 companies between 2020 and 2023, collected through manual search of the Internet. Overall, the datasets include 504 companies, with detailed information security breach and financial data available for 97 firms that experienced a disclosed information security breach. This document will describe the datasets in detail, explain the data collection procedure and shows the initial versions of the datasets. Contact at Tilburg University Francesco Lelli

Cyber Security in Financial Services Market Outlook

The global cyber security in financial services market size was valued at approximately USD 45 billion in 2023 and is projected to reach around USD 90 billion by 2032, growing at a compound annual growth rate (CAGR) of about 7.5% during the forecast period. This dynamic growth is fueled by multiple factors, including the increasing frequency and sophistication of cyber threats, the growing adoption of cloud-based services, and regulatory mandates that emphasize the protection of sensitive financial data. As digital transformation sweeps across the financial sector, financial institutions are becoming prime targets for cybercriminals, prompting a heightened focus on robust security measures to safeguard assets and maintain customer trust.

The surge in digital banking, mobile payments, and online financial services has significantly expanded the attack surface for cyber threats, making cyber security paramount in the financial sector. The continuous innovation in financial technologies, while improving service delivery, simultaneously introduces vulnerabilities that cybercriminals exploit. Financial institutions are under pressure to not only adopt new technologies but also ensure these systems are fortified against potential breaches. The integration of artificial intelligence and machine learning in financial services offers enhanced customer experiences and operational efficiencies, yet it also requires advanced security mechanisms to protect against increasingly sophisticated cyber threats.

Regulatory compliance is a critical driver of market growth, compelling organizations to prioritize cyber security investments. Governments and financial regulatory bodies worldwide are instituting stringent policies to protect consumer data and maintain the integrity of financial systems. Regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States highlight the global emphasis on cyber security. Compliance with such regulations necessitates substantial investments in security solutions and services, catalyzing market expansion. Financial institutions are adopting a proactive approach by implementing comprehensive security frameworks to prevent costly breaches and avoid reputational damage.

The increasing reliance on third-party vendors and outsourcing in financial services presents additional security challenges, further driving market growth. As financial institutions engage with a myriad of external service providers, ensuring data protection and securing supply chains becomes complex. Cyber security solutions are critical in managing third-party risks and ensuring that external partnerships do not compromise organizational security. Moreover, the global shift towards remote work, accelerated by the COVID-19 pandemic, has necessitated robust endpoint and network security solutions to protect sensitive information accessed outside traditional office environments.

Financial Security Services are becoming increasingly crucial as financial institutions grapple with the dual challenge of adopting innovative technologies while safeguarding sensitive data. These services encompass a range of protective measures designed to secure financial transactions, customer information, and institutional assets from cyber threats. As the financial landscape evolves, institutions are investing in comprehensive security solutions that not only address current vulnerabilities but also anticipate future risks. This proactive approach is essential in maintaining trust and ensuring the resilience of financial systems in the face of ever-evolving cyber threats.

Regionally, North America holds a substantial share of the cyber security market in financial services, driven by high technological adoption and significant investment in security infrastructure. The presence of major financial institutions and tech companies in this region further propels market growth. Europe is also a significant player, benefiting from stringent data protection regulations and the proactive stance of financial institutions towards cyber security. The Asia Pacific region is expected to witness the highest CAGR during the forecast period due to rapid digitalization, economic growth, and increasing cyber threats. Emerging economies in Latin America and the Middle East & Africa are progressively adopting advanced security solutions to counter the growing prevalence of cyber-attacks, albeit at a more moderate pace compared to other regions.</p&

Between 2008 and 2024, the most significant data breach in the financial industry worldwide was detected in 2019 in the United States at the First American Financial Corporation. This data breach caused the leakage of 885 million financial and personal records. The financial industry is one of the most targeted sectors by cyberattacks that lead to data breaches. However, cyber-attacks are not the only reason for a data breach. Sometimes data compromise occurs due to other reasons, such as system errors.

Vulnerability Scanning in BFSI Market Outlook

The vulnerability scanning in BFSI market size was valued at USD 1.5 billion in 2023 and is projected to reach USD 3.8 billion by 2032, growing at a CAGR of 10.6% during the forecast period. The significant growth factor driving this market includes the increasing sophistication of cyber threats and regulatory requirements for information security, alongside the rapid digitization of financial and insurance services.

One of the primary growth factors for the vulnerability scanning market in the BFSI sector is the rising instances of cyber-attacks and data breaches. Financial institutions, being the custodians of vast amounts of sensitive customer and financial data, are prime targets for cybercriminals. The increasing frequency and complexity of these attacks have heightened the demand for robust vulnerability scanning solutions that can preemptively identify and mitigate potential security vulnerabilities. Organizations are prioritizing investments in comprehensive security measures to safeguard their data and maintain customer trust.

Additionally, regulatory mandates play a crucial role in propelling the market forward. Governments and regulatory bodies worldwide are imposing stringent data security and privacy regulations on financial institutions. Compliance with regulations such as GDPR, PCI DSS, and various national cybersecurity laws necessitates the implementation of advanced vulnerability scanning tools. These regulations compel BFSI enterprises to conduct regular security assessments and ensure robust protection mechanisms are in place, thereby fueling the demand for vulnerability scanning solutions.

The ongoing digital transformation in the BFSI sector is another significant growth driver. The adoption of cloud services, mobile banking, and digital payments has expanded the attack surface, making financial institutions more vulnerable to cyber threats. As BFSI organizations innovate and integrate new technologies, the need for proactive security measures, including vulnerability scanning, becomes more critical. The shift towards digital-first strategies is accelerating the adoption of advanced security solutions to manage and mitigate the risks associated with digital platforms.

From a regional perspective, North America currently dominates the vulnerability scanning market in the BFSI sector, owing to the region's robust technological infrastructure and the presence of numerous financial institutions. However, Asia Pacific is expected to witness the highest growth rate during the forecast period. The rapid digitization, increasing internet penetration, and growing awareness about cybersecurity in countries like India and China contribute to the burgeoning demand for vulnerability scanning solutions in the region.

Component Analysis

The vulnerability scanning market in the BFSI sector is segmented into software and services. The software segment encompasses various tools and platforms designed to detect and report vulnerabilities in IT systems. This segment holds a significant share of the market, driven by the continuous development and enhancement of security software. Financial institutions are increasingly investing in advanced software solutions that offer real-time vulnerability assessments, automated scanning, and comprehensive reporting capabilities. The demand for customizable and scalable software solutions is particularly high among large enterprises, which require robust systems to manage extensive IT infrastructures.

On the other hand, the services segment includes consulting, implementation, and managed services related to vulnerability scanning. This segment is experiencing considerable growth due to the increasing need for expert guidance and support in deploying and managing vulnerability scanning solutions. Financial institutions often lack the in-house expertise to fully leverage advanced security tools, prompting them to seek assistance from specialized service providers. Managed services, in particular, are gaining traction as they offer continuous monitoring and management of vulnerabilities, allowing BFSI organizations to focus on their core operations while ensuring robust security.

The integration of artificial intelligence and machine learning technologies into vulnerability scanning software is a notable trend in this market. These technologies enable advanced threat detection and predictive analytics, enhancing the effectiveness of vulnerability assessments. AI-powered solutions can identify patterns and anomalies that traditional too

In 2023, there were ***** reported cyber incidents in the financial industry worldwide, up from ***** in the preceding year. Coherently, the number of data breaches increased within the last two examined years, going from *** in 2021 to ***** in 2023. Overall, 2023 saw the most significant number of cyber incidents since 2013.

According to Cognitive Market Research, the global Financial Services Cybersecurity Systems Services market size will be USD 26941.8 million in 2025. It will expand at a compound annual growth rate (CAGR) of 14.20% from 2025 to 2033.

North America held the major market share for more than 40% of the global revenue with a market size of USD 9968.47 million in 2025 and will grow at a compound annual growth rate (CAGR) of 12.0% from 2025 to 2033.
Europe accounted for a market share of over 30% of the global revenue with a market size of USD 7813.12 million.
APAC held a market share of around 23% of the global revenue with a market size of USD 6466.03 million in 2025 and will grow at a compound annual growth rate (CAGR) of 16.2% from 2025 to 2033.
South America has a market share of more than 5% of the global revenue with a market size of USD 1023.79 million in 2025 and will grow at a compound annual growth rate (CAGR) of 13.2% from 2025 to 2033.
The Middle East had a market share of around 2% of the global revenue and was estimated at a market size of USD 1077.67 million in 2025. It will grow at a compound annual growth rate (CAGR) of 13.5% from 2025 to 2033.
Africa had a market share of around 1% of the global revenue and was estimated at a market size of USD 592.72 million in 2025 and will grow at a compound annual growth rate (CAGR) of 13.9% from 2025 to 2033.
Banking category is the fastest growing segment of the Financial Services Cybersecurity Systems Services industry

Market Dynamics of Financial Services Cybersecurity Systems Services Market

Key Drivers for Financial Services Cybersecurity Systems Services Market

Increasing Cyber Threats and Sophistication of Attacks to Boost Market Growth

The growing sophistication of cyberattacks, particularly targeting financial institutions, is a significant driving factor for the Financial Services Cybersecurity Systems Services market. Financial institutions handle vast amounts of sensitive data, including personal financial information and transactions, making them prime targets for cybercriminals. In response to the increasing number of cyber threats such as phishing, ransomware, and data breaches, financial services firms are investing in advanced cybersecurity solutions to safeguard their operations. The financial sector is especially vulnerable due to its reliance on digital platforms, which increases the complexity of potential threats. This has prompted banks, insurance companies, and investment firms to enhance their cybersecurity infrastructures, adopt more robust protection systems, and invest in cybersecurity services. For instance, CrowdStrike announced its partnership with Ignition Technology to launch the Falcon cybersecurity platform in Ireland. By integrating Ignition’s market expertise with CrowdStrike’s advanced AI-driven tools, this partnership aims to improve breach prevention and promote a more secure and streamlined cybersecurity framework across Europe.

https://www.crowdstrike.com/en-us/press-releases/crowdstrike-and-ignition-to-drive-cybersecurity-transformation-ireland/

Regulatory Compliance and Data Privacy Laws To Boost Market Growth

As regulatory frameworks around data privacy and cybersecurity continue to evolve, financial institutions are required to adopt stricter security measures to ensure compliance. Regulations like the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) have heightened the focus on data protection, placing significant pressure on financial organizations to safeguard consumer information. Non-compliance with these regulations can lead to hefty fines, reputational damage, and loss of customer trust. As a result, financial services firms are increasingly turning to cybersecurity service providers to help navigate complex regulations and ensure their systems are secure and compliant.

Restraint Factor for the Financial Services Cybersecurity Systems Services Market

High Implementation Costs, Will Limit Market Growth

Financial institutions are often required to invest significantly in advanced cybersecurity systems, including specialized software, hardware infrastructure, and expert personnel. These systems often require ongoing maintenance, upgrades, and integration with existing IT infrastructure, which adds to the financial burden. For small and medium-sized financial institutions, the upfront co...

Breach and Attack Simulation for Finance Market Outlook

According to our latest research, the global breach and attack simulation for finance market size was valued at USD 1.38 billion in 2024, and is anticipated to grow at a robust CAGR of 31.5% during the forecast period, reaching approximately USD 13.04 billion by 2033. This exceptional growth is primarily driven by the escalating sophistication of cyber threats targeting the financial sector, coupled with stringent regulatory mandates and the need for continuous security validation. The finance industry’s increasing reliance on digital infrastructure and the proliferation of advanced persistent threats (APTs) are compelling financial institutions to adopt breach and attack simulation solutions as a proactive defense mechanism.

One of the most significant growth factors for the breach and attack simulation for finance market is the rapidly evolving cyber threat landscape. Financial institutions are prime targets for cybercriminals due to the sensitive nature of the data they handle and the direct access to monetary assets. The rise of ransomware attacks, phishing campaigns, and other sophisticated attack vectors has exposed vulnerabilities in traditional security infrastructures. As a result, financial organizations are increasingly leveraging breach and attack simulation tools to identify security gaps, assess their security posture, and enhance incident response capabilities. These tools provide continuous, automated, and realistic attack simulations, enabling organizations to stay ahead of emerging threats and reduce the risk of costly data breaches.

Another key driver propelling market growth is the tightening regulatory environment in the finance sector. Regulatory bodies worldwide, such as the European Central Bank (ECB), the U.S. Securities and Exchange Commission (SEC), and the Monetary Authority of Singapore (MAS), are imposing stringent cybersecurity requirements on financial institutions. Compliance with standards like GDPR, PCI DSS, and FFIEC mandates regular security assessments, penetration tests, and risk management practices. Breach and attack simulation solutions offer a scalable and efficient way for financial organizations to demonstrate compliance, conduct regular assessments, and generate comprehensive reports for auditors and regulators. This not only helps in avoiding hefty fines but also enhances the organization’s reputation and customer trust.

The surge in digital transformation initiatives within the financial industry is also fueling the adoption of breach and attack simulation solutions. As banks, insurance companies, and investment firms increasingly embrace cloud computing, mobile banking, and fintech innovations, their attack surfaces expand significantly. The adoption of hybrid and multi-cloud environments, coupled with the integration of third-party vendors, introduces new vulnerabilities and complexities in managing security. Breach and attack simulation platforms provide a holistic view of the organization’s security posture across diverse environments, enabling IT teams to prioritize remediation efforts and optimize security investments. This proactive approach is essential in an era where cyber threats are becoming more targeted and sophisticated.

From a regional perspective, North America currently dominates the breach and attack simulation for finance market, accounting for the largest revenue share in 2024. The region’s leadership can be attributed to the presence of major financial hubs, early adoption of advanced cybersecurity technologies, and a highly regulated environment. However, Asia Pacific is expected to witness the fastest CAGR during the forecast period, driven by rapid digitalization, growing investments in fintech, and increasing awareness of cybersecurity risks among financial institutions. Europe, with its strong regulatory framework and focus on data privacy, also represents a significant market, while the Middle East & Africa and Latin America are emerging as promising regions due to rising cyber threats and regulatory initiatives.

Component Analysis

The breach and attack simulation for finance market is segmented by component into software and services. Software solutions constitute the backbone of this market, offering automated platforms that simulate a wide range of cyberattacks to identify vulnerabilities and assess security controls. These platforms are equipped with advanced analytics, machine l

As of 2024, the average cost of a data breach in the United States amounted to **** million U.S. dollars, down from **** million U.S. dollars in the previous year. The global average cost per data breach was **** million U.S. dollars in 2024. Cost of a data breach in different countries worldwide Data breaches impose a big threat for organizations globally. The monetary damage caused by data breaches has increased in many markets in the past decade. In 2023, Canada followed the U.S. by data breach costs, with an average of **** million U.S. dollars. Since 2019, the average monetary damage caused by loss of sensitive information in Canada has increased notably. In the United Kingdom, the average cost of a data breach in 2024 amounted to around **** million U.S. dollars, while in Germany it stood at **** million U.S. dollars. The cost of data breach by industry and segment Data breach costs vary depending on the industry and segment. For the fourth consecutive year, the global healthcare sector registered the highest costs of data breach, which in 2024 amounted to about **** million U.S. dollars. Financial institutions ranked second, with an average cost of *** million U.S. dollars for a data breach. Detection and escalation was the costliest segment in data breaches worldwide, with **** U.S. dollars on average. The cost for lost business ranked second, while response following a breach came across as the third-costliest segment.

Data Breach Response Insurance Market Outlook

According to our latest research, the global Data Breach Response Insurance market size reached USD 14.3 billion in 2024, demonstrating robust growth driven by the increasing frequency and severity of cyberattacks. The market is expected to expand at a CAGR of 18.1% from 2025 to 2033, reaching an estimated USD 59.8 billion by 2033. This significant growth trajectory is primarily fueled by heightened regulatory requirements, the proliferation of digital assets, and the growing awareness among organizations regarding the financial and reputational risks associated with data breaches.

The primary growth factor for the Data Breach Response Insurance market is the escalating complexity and frequency of cyber threats across all industries. As organizations increasingly rely on digital infrastructure, the risk of unauthorized data access, ransomware attacks, and phishing scams has surged. High-profile data breaches in sectors like healthcare, finance, and retail have underscored the substantial costs associated with remediation, legal liabilities, and customer notification. As a result, companies are prioritizing comprehensive insurance coverage to mitigate these risks, propelling the demand for specialized data breach response insurance products.

Another significant driver is the evolving regulatory landscape, particularly in North America and Europe. Governments and regulatory bodies are imposing stricter data protection laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). These regulations mandate rapid incident response, customer notification, and financial compensation in the event of a breach. Failure to comply can result in substantial fines and reputational damage. Consequently, organizations are increasingly seeking data breach response insurance as a proactive measure to ensure regulatory compliance and financial stability in the face of potential breaches.

The growing digital transformation across small and medium enterprises (SMEs) is also contributing to market expansion. SMEs, traditionally less equipped to manage sophisticated cyber threats, are now recognizing the critical importance of data breach response insurance. The rise of remote work, cloud adoption, and e-commerce has exposed these organizations to new vulnerabilities. Insurance providers are responding by tailoring products specifically for SMEs, offering flexible coverage options and competitive premiums. This trend is expected to drive further adoption, particularly in emerging markets where digitalization is accelerating.

Regionally, North America dominates the Data Breach Response Insurance market due to its advanced digital ecosystem, high incidence of cyberattacks, and stringent regulatory framework. Europe follows closely, benefiting from strong data protection laws and a mature insurance sector. The Asia Pacific region is witnessing the fastest growth, fueled by rapid digitalization, increasing cybercrime, and rising awareness among enterprises. Latin America and the Middle East & Africa are gradually emerging as lucrative markets, driven by digital infrastructure investments and regulatory developments. Overall, the global outlook for the data breach response insurance market remains highly positive, with substantial opportunities for insurers, technology providers, and enterprises alike.

Coverage Type Analysis

The Coverage Type segment in the Data Breach Response Insurance market is broadly categorized into First-Party Coverage, Third-Party Coverage, and Others. First-Party Coverage addresses the direct costs incurred by the insured organization in the aftermath of a data breach, such as forensic investigations, data restoration, business interruption, and customer notification expenses. This segment has seen significant growth as organizations increasingly recognize the immediate financial impact of breaches. Insurers are enhancing first-party products with

As of 2024, the average cost of a data breach in the financial industry worldwide was 6.08 million U.S. dollars, up from 5.90 U.S. dollars in 2024. The global average cost of a data breach across all studied industries was 4.88 million U.S. dollars.

The Cyber Liability Insurance industry has benefited from more services being conducted online, leading more users to exchange their personal and financial information online. Cyberattacks and hacking could result in customer identity theft and financial loss for a company, placing liability on the business. Cyber liability insurance has become increasingly attractive to companies seeking protection against financial losses from legal issues stemming from data breaches. E-commerce and online auctions have increased demand for services as these online retailers often fall victim to cybersecurity attacks. Over the past five years, revenue has been growing at a CAGR of 18.8% to $6.4 billion, including an expected increase of 5.8% in 2024 alone. Over the past five years, the industry has benefited from companies integrating online services into their business operations. In recent years, financial institutions have been one source of increased demand for insurers' services. These institutions are privy to a wide range of their customer's personal and financial information, making them a prime target for a cybersecurity attack. In addition, many businesses shifted their operations online, increasing demand for cybersecurity. Also, major cybersecurity breaches have contributed to the demand for industry services. Over the next five years, the percentage of business conducted online is expected to accelerate, encouraging more businesses to purchase cyber liability insurance to prevent significant financial loss from potential cyberattacks. Growth in major markets, like healthcare, financial services and retail, is expected to help push the industry forward during the outlook period because of growing concerns regarding identity theft. Also, internet traffic volume is expected to climb rapidly over the next five years, prompting new online businesses to purchase cyber liability coverage. Overall, industry revenue is forecast to grow at a CAGR of 5.2% to $8.3 billion over the five years to 2029.

The Data Breach and Attack Simulation (DBAS) solution market is experiencing robust growth, driven by the escalating frequency and sophistication of cyberattacks targeting diverse sectors. The increasing adoption of cloud technologies and the expanding attack surface are key factors fueling market expansion. While precise market sizing data is unavailable, considering a typical CAGR of 15-20% in the cybersecurity sector and a current market size possibly in the range of $2-3 billion in 2025 (based on similar technology market sizes), we can project significant future growth. Key segments within the market include financial services, government, and healthcare, each facing unique cybersecurity challenges. The financial sector's reliance on sensitive data makes it a primary target, while government agencies are responsible for protecting critical infrastructure and national security. The healthcare sector is increasingly vulnerable to attacks targeting patient data. Further segmentation by solution type (Configuration, Patch, and Threat Management) reflects the varied approaches to simulating and testing security defenses. The market is fragmented with multiple vendors offering specialized solutions, leading to competitive pricing and innovation. Growth constraints could stem from the complexity of implementation, high initial investment costs, and the need for skilled cybersecurity professionals to manage DBAS solutions effectively. However, these challenges are likely to be outweighed by the increasing need to proactively test security postures and meet regulatory compliance requirements. The projected market growth will be significantly influenced by advancements in artificial intelligence (AI) and machine learning (ML), enhancing the automation and effectiveness of simulation capabilities. We anticipate greater focus on integrating DBAS with other security tools for a holistic approach. The expansion into emerging markets, particularly in Asia-Pacific, will further contribute to market expansion, as organizations in these regions increasingly recognize the criticality of cybersecurity. The increasing adoption of managed security service providers (MSSPs) offering DBAS solutions will also play a role in fostering wider adoption and driving market growth. Continued regulatory pressure globally, pushing companies to demonstrate robust security postures, will create further demand for DBAS solutions. The evolution of attack techniques necessitates continuous adaptation of DBAS solutions, promising ongoing innovation within this rapidly growing sector.

Cyber Security Insurance Market Outlook

The global cyber security insurance market size was valued at approximately USD 11 billion in 2023 and is expected to grow significantly to reach around USD 44 billion by 2032, exhibiting a remarkable compound annual growth rate (CAGR) of roughly 16.5%. This robust growth is primarily driven by the increasing frequency and sophistication of cyber threats, which have compelled organizations across various sectors to invest in insurance solutions that can mitigate potential risks and financial losses associated with data breaches and cyber-attacks. As businesses continue to digitize their operations, the demand for comprehensive cyber security insurance policies is expected to rise exponentially, providing a substantial growth opportunity for insurance providers worldwide.

One of the key growth factors for the cyber security insurance market is the escalating number of cyber incidents globally. The digital transformation journey undertaken by many organizations has exposed them to a wider array of cyber threats, ranging from ransomware attacks to data breaches. These incidents not only result in significant financial losses but also damage brand reputation and customer trust. Consequently, businesses are increasingly recognizing the importance of having a robust insurance plan that can offer financial protection and support in the event of a cyber incident. Additionally, regulatory frameworks around data protection and privacy are becoming more stringent, prompting companies to adopt cyber insurance as part of their compliance strategies.

Moreover, the increasing awareness of cyber risks among small and medium-sized enterprises (SMEs) is another pivotal factor contributing to market growth. SMEs often lack the resources to invest in advanced cybersecurity measures, making them vulnerable to cyber-attacks. As a result, many are turning to cyber insurance as a viable solution to bolster their cyber risk management strategies. Insurers are responding by offering tailored policies suited to the specific needs and budgets of SMEs, thereby expanding their reach and increasing market penetration. This trend is expected to continue, driven by the realization among SMEs of the catastrophic consequences that cyber incidents can have on their operations.

Technological advancements and the proliferation of cloud-based services are also catalyzing the growth of the cyber security insurance market. The shift towards cloud computing and remote work has expanded the attack surface for cybercriminals, thereby elevating the risk of security breaches. In response, insurers are developing innovative products that cover cloud-specific risks, offering protection against potential vulnerabilities in cloud infrastructure. This adaptability and innovation in product offerings are attracting a wider range of customers and are likely to sustain market expansion over the forecast period.

Regionally, North America is expected to maintain its dominance in the cyber security insurance market, driven by the early adoption of technology and a well-established insurance sector. The region's strong regulatory landscape, coupled with the presence of major players, contributes to its leading position. However, Asia Pacific is projected to exhibit the highest growth rate, with a CAGR of over 18% during the forecast period. This growth is fueled by the rapid digitization of economies such as China and India, alongside increasing awareness of cyber risks. Europe is also anticipated to witness substantial growth due to stringent data protection regulations and increasing incidents of cyber threats across the region.

Coverage Type Analysis

The cyber security insurance market is segmented by coverage type, which includes data breach, cyber liability, business interruption, and others. Data breach insurance remains one of the most sought-after coverages, driven by the alarming increase in incidents where sensitive information is compromised. As cybercriminals develop more sophisticated methods to infiltrate systems, businesses are under immense pressure to protect their customer and employee data. Data breach insurance provides critical financial and support services, including coverage for legal fees, notification costs, and credit monitoring services, making it an essential component of an organization's risk management strategy.

Cyber liability insurance is another significant coverage type within the market, addressing the third-party claims associated with cyber incidents. This can include legal costs, settlements, and judgments related to data breaches

As of 2024, the average cost of a data breach in the United States amounted to 9.36 million U.S. dollars, down from 9.48 million U.S. dollars in the previous year. The global average cost per data breach was 4.88 million U.S. dollars in 2024. Cost of a data breach in different countries worldwide Data breaches impose a big threat for organizations globally. The monetary damage caused by data breaches has increased in many markets in the past decade. In 2023, Canada followed the U.S. by data breach costs, with an average of 5.13 million U.S. dollars. Since 2019, the average monetary damage caused by loss of sensitive information in Canada has increased notably. In the United Kingdom, the average cost of a data breach in 2024 amounted to around 4.53 million U.S. dollars, while in Germany it stood at 5.31 million U.S. dollars. The cost of data breach by industry and segment Data breach costs vary depending on the industry and segment. For the fourth consecutive year, the global healthcare sector registered the highest costs of data breach, which in 2024 amounted to about nine million U.S. dollars. Financial institutions ranked second, with an average cost of six million U.S. dollars for a data breach. Detection and escalation was the costliest segment in data breaches worldwide, with 1.63 U.S. dollars on average. The cost for lost business ranked second, while response following a breach came across as the third-costliest segment.

As of February 2025, the United States ranked first by the average cost of a data breach, 10.22 million U.S. dollars. The average cost of data breaches in the Middle East was 7.29 million U.S. dollars. Benelux followed in the ranking, with 6.24 million U.S. dollars. In the measured period, the global average data breach cost was 4.44 million U.S. dollars. Phishing scams in the U.S. Breached data often ends up in the hands of threat actors who use it for malicious purposes, including online scams. Phishing continues to be a major threat in North America, particularly on smartphones. In the second quarter of 2023, the region recorded the highest number of phishing and malicious attack attempts globally. The United States was particularly affected, with 45 percent of U.S. citizens reporting being targeted by scam texts, e-mails, and calls on a daily basis. Additionally, phishing and spoofing were the most common types of cybercrime, impacting 298 thousand individuals in 2023. These attacks led to financial losses, with U.S. victims reporting nearly 20 billion U.S. dollars in damages throughout the year. U.S. users and data privacy Despite only 20 percent of internet users in the United States being highly knowledgeable about data privacy and cybersecurity, a significant portion of users demonstrated caution and awareness in protecting their information. In fact, over half of surveyed U.S. users reported being somewhat confident in knowing the right steps to take in the event of a cyberattack. Furthermore, 43 percent of U.S. users actively decline cookies on websites, reflecting their increasing concern for data protection. Many respondents also take additional steps to safeguard their digital privacy, such as limiting or avoiding clicking on ads as well as not answering phone calls due to cybersecurity risks.