The uptake of cyber insurance by UK small and medium-sized enterprises (SMEs) has grown significantly in recent years but coverage remains low compared to other commercial products, according to research and consulting firm GlobalData.
The purchase of cyber insurance by SMEs grew from 2.1 percent in 2014 to 13.7 percent in 2016. But demand should grow further, the research firm suggested, pointing to the fact that UK businesses are increasingly dependent on the digital space and crime is moving online.
“Any business that holds personal information that can be sold on or used for identify fraud is vulnerable to cybercrime,” said analyst Danielle Cripps. “SMEs are increasingly threatened by cybercriminals or system failures which a cyber insurance policy could help protect against. Indeed, SMEs could be argued to be most in need, as they have the fewest resources to recover from financial losses.”
Businesses should be focusing on improving their cyber security to prevent the compromising of personal data, the report suggested. While cyber insurance itself cannot prevent breaches, it has become an important tool in helping organizations recover from attacks and mitigate the impact on business continuity in all aspects of trade and reputation.
Cripps said: “Cyber security will improve considerably in the UK as a result of the government’s new National Cyber Security Strategy and the EU’s General Data Protection Regulation. The latter, which comes into force on May 25, 2018, is expected to increase the number of companies that hold cover due to its requirement to notify both regulators and customers put at high risk about data breaches, and investigate issues with undue delay.
“Insurance will help by providing financial support, and may additionally give access to extra technical support from experts called out to help with a claim. Businesses will also have more accountability and conditions to comply with, making them more liable under the new regulation. The additional risk this creates means businesses are more likely to seek cover which will help drive the market.”
Read more: https://www.intelligentinsurer.com/news/uk-sme-s-grow-cyber-protection-but-coverage-rates-still-low-11446