Cyber Security Awareness Month: Cyber Insurance is now a necessity for SMEs5th October 2020
With modern businesses reliant on technology for basic functions such as data storage and communication, it comes as no surprise that cyber crime is an ever-increasing threat for businesses, both large and small. Recently, the coronavirus lockdown has led to millions of employees working from home, using personal devices to log in to secure networks and leaving businesses more vulnerable to cybercrime. As a result, we have seen an increased number of cyber attacks, as criminals look to take advantage of businesses during this time.
For many years, awareness of cyber risks has been a key factor inhibiting growth and penetration in the market, but the recent spate of cyber-attacks will likely awaken SMEs and individuals to the necessity of cyber cover – March 2020 saw ransomware attacks increase by 148%.
Considering the current landscape, a recent bulletin from BSI highlighted the challenges of working from home, which could prove to be a ‘watershed moment’ for cyber insurance, with its need changing from a ‘luxury’ to a ‘must-have’ purchase as our digital dependency increases.
Having highlighted the growing importance of Cyber cover for SMEs at Broker Expo in November 2019, our Cyber & Financial Lines Underwriting Manager, Matt Drinkwater said “Until recently, it has only been traditional industries such as retailers and financial institutions who were buying cyber policies. But, we are beginning to see a shift in more non-traditional markets buying cover too.
“This change is due to the evolving nature of cyber attacks, as the insurance was originally designed to respond to highly-publicised data breaches at large organisations. Whereas now, smaller business owners appreciate that they too can fall victim to ransomware attacks, leading to extortion and business interruption, which can financially cripple SMEs – as well as cyber crime which is becoming increasingly prevalent.”
Looking at a recent Insurance Age article which compares data from April 2020 with the same period last year, it appears that businesses are indeed beginning to understand the importance of cyber cover. The analysis shows that while overall insurance policy volumes in general fell, cyber specific insurance sales volume actually increased by 340%. This increase is likely a result of Covid-19’s impact, with the pandemic forcing businesses to rethink their strategies and adapt to more online-based models.
For businesses that are looking for cyber protection, our comprehensive CyberSafe product has been carefully designed to address the risks that SMEs may face. Our policy offers first party cover benefits, including business interruption and can extend to include an extensive cyber crime section by answering just one additional question, along with third party claims protection and a 24/7 integrated breach response provided by ReSecure. By providing brokers with access to our quote and bind e-trade platform, which includes an immediate premium indication and target premium feedback facility, we aim to make the buying process quick and simple.
With October being Cyber Security Awareness Month, we at NMU are once again taking the time to educate and inform about the ever-changing cyber market. The theme for this year “Do Your Part. #BeCyberSmart” empowers both employees and organisations, while emphasising 2020’s key message of implementing stronger security practices and raising community awareness. With this in mind, we will be exploring a range of new and emerging cyber risks during October.