Cyber insurance policy renewal rate stands at a whopping near 100%

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, as per a study by Policybazaar.

The sample size: 300-400 companies at the moment (ranging from small to big corporates: lending companies, tech companies, banks etc)

Companies with turnover over ₹10 crore leading cyber insurance adoption; BFSI and technology 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, as per study.

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.”

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, as per study.

Cyber insurance claims data highlights the primary drivers behind policy payouts, with network or business interruptions caused by data breaches accounting for the largest share at 45%. Social engineering attacks, where attackers manipulate individuals into divulging confidential information, make up 25% of the claims. Ransomware incidents, in which cybercriminals encrypt systems and demand payment for restoration, represent 20% of claims. The remaining 10% fall under other miscellaneous categories, underscoring the diverse nature of cyber threats businesses face today.

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.