Insurers ought to look to focus on the cyber insurance coverage hole amongst SMEs

A disparity will be seen within the adoption of cyber insurance coverage amongst SMEs. Whereas medium-sized companies boast a strong 52.5% uptake and small-sized companies observe with 41.4% penetration, micro-enterprises and sole merchants lag behind at simply 20.1% and 11.3%, respectively. But it’s evident that there’s a robust want for cyber insurance coverage, as considerations about cybercrime stay prevalent amongst SMEs of all sizes, with over 50% involved to a point.

With 63.9% of medium-sized companies expressing some stage of concern about cybercrime in 2023 (up from 62.7% in 2022), GlobalData’s survey emphasises the excessive stage of fear amongst these companies. This elevated sense of concern is in line with their increased adoption charges of cyber insurance coverage, as medium corporations are conscious of the potential results on their day-to-day operations. But it’s fascinating to notice that even corporations with decrease cyber insurance coverage adoption charges, like sole merchants and micro companies, nonetheless categorical a substantial amount of concern at 54.8% and 51.9%, respectively.

Companies of all sizes are in danger from the evolving nature of cybercrime. As such, insurers ought to attempt to supply protection choices that meet the wants of all sorts of companies. Cowbell is an instance of an insurer that has utilised its cyber providing to succeed in all sizes of the SME market; it’s now increasing into the mid-market.

SMEs have been additionally requested how cyber threat has modified in comparison with earlier than the COVID-19 pandemic. GlobalData’s survey outcomes present that perceived cyber threat for SMEs has elevated, rising from 32.7% in 2022 to 34.3% in 2023. In response to this pattern, 26.5% of SMEs stated they’d be extra seemingly to purchase protection in 2023, up from 22.7% in 2022. The information signifies the rising want for cyber insurance coverage out there—a pattern that innovators like Cowbell are capitalizing on.

Having first centered on the SME sector, Cowbell has established itself as a progressive participant within the cyber insurance coverage house. As of January 2024, Cowbell is providing protection to mid-market corporations (these with an annual turnover of as much as £1bn). With a big threat pool consisting of 4.5 million SMEs within the UK, its strategy permits for data-driven evaluations of cyber dangers. This info is then handed on to brokers to strengthen bonds and broaden their understanding of cyber threat, demonstrating a complete strategy to threat administration.

Insurance coverage corporations should alter their merchandise to satisfy the wants of each small and enormous companies in gentle of the cyber insurance coverage hole. Regardless of their decrease adoption fee, micro and sole merchants proceed to be involved about cyber threats, which presents a large market alternative. Insurance coverage corporations also needs to work with brokers to construct partnerships and educate corporations about how cyber dangers are altering. Doing so will allow them to benefit from the cyber insurance coverage hole to enhance their insurance coverage books.