Insurers failing to discuss cyber insurance with SMEs

Insurance brokers have failed to discuss cyber insurance with more than half of UK SMEs, despite the growing threat of cyber crime, according to a new report.

In a survey by CFC Underwriting, 51 per cent of UK SMEs said their insurance brokers had failed to discuss cyber insurance plans with them, despite the increasing risk.

“This figure is quite shocking, particularly when you put some context around it,” said Graeme Newman, chief innovation officer at CFC, commenting on the findings.

“90 per cent of our cyber claims come from businesses with less than £50 million in revenue and we get more than one claim every single day.

“This shows just how vulnerable SMEs are to cyber attacks. I think it sadly demonstrates that cyber insurance is still well outside the comfort zone of many brokers who are providing their clients with a wide range of commercial covers.

“However, the research shows that there is also a gulf in awareness amongst SMEs themselves as to the very real threat that cyber crime poses.”

Cyber crime now accounts for more than half of all UK crime, but a fifth of SMEs have never addressed cyber risk and 56 per cent do not have an incident response plan.

SME Publications/ SME XPO 2024

“The insurance industry should be doing more to raise awareness amongst SMEs that this is just as significant a risk as others that a business faces,” Newman said.

“In order to do that, we need to drop the hype and confusing rhetoric and provide our clients with clear facts and a crisp explanation of what cyber risk is actually about.

“With major changes to UK data protection legislation on the horizon, it is more important than ever that brokers put this on the agenda to ensure that their clients have the right cover in place to protect their business.”

For more from the survey, see the CFC Underwriting website.

Matt Smith | @MattCASmith

SME Publications/ SME XPO 2024