GlobalData’s 2020 UK SME Insurance Survey indicates that the uptake of cyber insurance among SMEs is low at just 12.7%.
Findings from Beazley indicate that businesses operating in the middle market (those with annual revenue in excess of $35m) have seen an increase in their exposure to fraudulent-instruction attacks. These accounted for 55% of cases in Q2 2020, up by 21 percentage points when compared to the first quarter.
The pandemic has increased businesses’ reliance on technology in order to operate during lockdown, while social distancing guidelines continue to promote home working. With this growing dependence on technology comes an increase in cyber risk. Given this, the need for cyber insurance has arguably never been higher. Traditionally, cyber insurance has seen greater levels of uptake and interest among mid-market and larger corporations, but the pandemic has accelerated the need for smaller business to purchase cover as well.
According to Beazley, specific industries have been at greater risk to cyber threats during the pandemic, particularly healthcare, manufacturing, real estate, and education.
Among SMEs operating in these industries, GlobalData research indicates that cyber insurance uptake is lowest within the health and social work sector, with 25.9% holding cyber insurance coverage. This sector will arguably have been one of the most directly and heavily impacted by the spread of COVID-19, and having had to respond directly to coronavirus’ effects on the population, the increased cyber threats it faces adds further concern.
The insurance industry should use this as an opportunity to engage with the SME market in particular, as larger corporations will typically have cyber insurance in place. The impact that a cyberattack could have on a business of this size could be debilitating due to financial losses, and given the reliance on technology during COVID-19, there is no better time to engage with prospective customers.