Brokers and SMEs far apart on cyber risks, says Sedgwick

New research from Sedgwick has found a stark perception gap between small- and medium-sized entities (SMEs) and brokers when it comes to cyber risks.

Sedgwick carried out two extensive surveys of UK insurance brokers and SMEs on their awareness and attitudes toward cyber insurance risk, as well as the impact and importance placed on different cyber attacks.

Of the brokers questioned, cyber insurance only made up approximately 5% of their current book despite the fact that SME respondents considered cyber crime to be a higher risk concern to their business than Brexit.

The survey of brokers indicated lower perceived cyber risks for SMEs, with only 47% believing that SMEs have concerns over cyber and data misuse.

But 91% of SMEs surveyed indicated concern over cyber risks, further demonstrating a significant perception gap.

The survey also revealed stark attitudinal differences towards cyber insurance between SMEs that have had a breach and those that have not.

Some 85% of SMEs that have been affected by a breach indicated that cyber insurance was of ‘high importance’ to them, compared to 22% of SMEs that have yet to be a victim of a cyber breach.

Dr Mark Hawksworth, global head of cyber and technology specialist practice group at Sedgwick, said: “This report comes at a critical time as businesses are increasingly transacting online and as a result are more exposed to cyber risks. What this research highlights is that brokers have a real opportunity to lead the way in educating and informing SMEs on the scope of cyber protection.”

“SME respondents indicated that cyber risk was a top three concern for their business. However, just under half claim to have at least public liability (48%), employer’s liability (46%) or property insurance (42%). Only 15% of SMEs have cyber-specific insurance, while 60% of micro SMEs admitted that their employees have had no cyber training.”

“We believe brokers have the opportunity to bridge the perception gap by providing training and support for SMEs. However, it is important that the policies they offer are not only priced appropriately but are fit for purpose in an ever changing cyber risk environment.”  

The Sedgwick brokers and SMEs cyber research surveyed a representative sample of brokers and SMEs in the UK.

Two hundred and fifty provincial, super regional and national brokers were surveyed, while 350 SMEs with up to 250 employees also responded to the survey.