More SMEs Are Buying Cyber Cover, Says GlobalData

Almost one quarter of small-to-medium enterprises (SMEs) in the UK have purchased cyber insurance due to increased remote working as a result of COVID-19, according to a survey by GlobalData. The leading data and analytics company also notes that 21.6% of firms purchased cover based on media coverage of cyberattacks.

Benjamin Hatton, Insurance Analyst at GlobalData, comments: “Businesses are becoming more proactive in managing the dangers of a cyberattack, in the knowledge that home working can lead to greater risks in this space. Media coverage showcasing the perils of cyberattacks is important in continuing to highlight the threats that businesses face.”

The survey further highlights the importance of professional recommendations to businesses, with 21.9% of businesses stating that they were advised by a broker to purchase cyber insurance. Financial advisors are also advocating the use of cyber insurance, with 17.3% of firms saying they purchased cover after receiving counsel from their financial advisor.

Hatton continues: “Brokers play an important role in advising customers to take the right level of cover, ensuring that firms are properly protected from cyber threats. Financial advisors also have this responsibility in ensuring that UK SMEs have the cover that they need to protect their business against the growingly hostile cyber landscape.”

The survey further reveals that only 31.5% of UK SMEs have cyber cover. This is because many small- and micro-sized firms believe that their business is not threatened by cyber risk. In all, 38.1% of SMEs that do not hold cyber insurance believe that it is unlikely their company will be targeted by a cyberattack, while a further 17.2% believe that the cover is too expensive.

Hatton adds: “For the insurance industry moving forward, it is important for providers to assist businesses in purchasing the level of cyber insurance that most suits their individual needs. Targeting the underserved small- and micro-sized firms is key to winning future business in this space.”