Brokers are failing on cyber insurance - report
Brokers are failing their clients in what has become one of the hottest areas of insurance – at least if a new report is to be believed.
According to research from CFC Underwriting, over half of UK-based SMEs state that their insurance broker has not even raised the issue of cyber insurance with them.
“This figure is quite shocking particularly when you put some context around it. 90% of our cyber claims come from businesses with less than £50 million in revenue and we get more than one claim every single day,” said Graeme Newman, chief innovation officer at CFC. “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.”
CFC states that cyber offences account for more than half of the crime total in the whole country – but there is a distinct lack of awareness around the issue. In fact, when SMEs were asked about the biggest threats to their business, a fifth went as far as to say they have never even assessed their exposure to the risk. Indeed 56% do not have an incident response plan in place.
“The insurance industry should be doing more to raise awareness amongst SMEs that this is just as significant a risk as others that aa business faces,” Newman concluded. “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.”