Weak IT Security Infrastructure Heightens Cyber Risks
The global specialty insurance market is on track to expand by $57.25 billion from 2023 to 2028, achieving a compound annual growth rate (CAGR) of 10.36%, according to a new report from Technavio.
Several factors are driving this projected growth, including increased globalisation, the emergence of new industries, and innovative business models. The rising frequency of natural disasters and climate-related events is also spurring demand for specialty insurance as businesses seek to mitigate these evolving risks.
The expansion of multinational corporations and international trade agreements, along with advancements in transportation and communication technologies, is breaking down barriers to global commerce. These developments are fueling a growing need for specialized insurance products tailored to the risks of increasingly interconnected and complex markets.
However, the industry faces significant challenges, particularly with the escalating threat of cyberattacks. As more companies adopt cloud services and integrate advanced technologies, they become more vulnerable to cyber risks, such as distributed denial-of-service (DDoS) attacks and ransomware.
In April 2023, a major incident underscored these vulnerabilities when the Insurance Information Bureau of India suffered a cyberattack, potentially exposing sensitive data. This incident highlights how the lack of a robust IT security infrastructure poses a threat to business continuity and could impede the specialty insurance market’s growth.
Despite these obstacles, the specialty insurance market is expected to remain resilient. Companies are increasingly prioritizing risk management and disaster recovery services, ensuring steady demand for specialty insurance products, even in the face of heightened cybersecurity threats.
As businesses continue to navigate a complex risk landscape, the specialty insurance sector’s role in providing tailored coverage for emerging risks remains essential to global commerce and industry.
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