Cybersecurity insurance in emerging digital economies: the case of Nigeria

Abstract

This study examines the state of cybersecurity insurance (CSI) in Nigeria’s emerging digital economy, where fintech, e-commerce, and mobile banking innovations are increasingly threatened by cyber risks such as data breaches, phishing attacks, and ransomware. The objectives were to investigate the level of awareness and demand for cybersecurity insurance, to evaluate the readiness of insurers to provide CSI products, and to recommend measures for developing the market. Data were collected from 241 organizations across financial services, telecommunications, e-commerce, and small-to-medium enterprises (SMEs). Descriptive statistics indicated moderate awareness (62%) but low adoption, with demand higher among fintech firms (74%) and telecommunications companies (69%) compared to SMEs (33%). Insurers demonstrated limited readiness, as only 21% currently offer cyber-specific products, citing inadequate actuarial data, lack of technical expertise, and absence of clear regulatory frameworks as barriers. Nevertheless, 64% expressed willingness to invest in CSI development if supported by regulatory guidance and market incentives. The study concludes that while Nigeria’s digital economy is rapidly expanding, CSI adoption remains underdeveloped, creating systemic vulnerabilities. It recommends awareness campaigns, regulatory intervention, and the development of affordable, sector-specific products to enhance adoption and build resilience against cyber risks.