Insureds ‘dropping cyber coverage because of cost of living crisis’: Brokers

Insureds are dropping their standalone cyber coverage because of the ongoing cost of living crisis, according to a recent survey by the British Insurance Brokers Association (Biba).

Over 40% of respondents to the survey said that clients that previously held cover were no longer insuring their cyber risks. Cyber insurance, Biba said, was one of the areas “most affected” by the cost of living crisis.

Graeme Trudgill, Biba’s executive director, said: “It is concerning that businesses are cutting cyber cover when the risk is growing so we want them to understand the protection and wider everyday support that is available with leading cyber insurance. Cyber insurance is not just about making a claim.”

Small and medium-sized enterprises (SMEs) account for 96% of all cyber-attacks, according to cyber MGA CFC Underwriting, as they are often soft targets for criminals to extort money or are the back door, as suppliers, into larger businesses, Biba noted. 

Only 5% of UK businesses have a standalone cyber policy and 43% have some cyber cover as part of a wider insurance policy according to the Department of Culture Media & Sport (DCMS) Cyber Security Breaches Survey 2022).

The decision of many insureds to abandon standalone cyber policies comes at a bad time, as the pandemic saw a huge shift towards online trading.