In Focus: Are brokers struggling to sell cyber insurance in the soft market?

Despite cyber attacks becoming headline news over the last two years, new government figures show that there is a skills gap when it comes to cyber security.

Carried out by Ipsos and Perspective Economics on behalf of the Department for Science, Innovation and Technology, the data, published on 29 September 2026, showed that over half (57%) of businesses had a basic technical skills gap, an increase from 2025 (49%).

And almost half of individuals responsible for cyber security in UK businesses and charities (47% each), lacked the confidence to deal with cyber security breaches or attacks, but had also not outsourced this function.

This wide-spread attitude comes despite it being clear that the cost of a cyber attack can be extremely damaging. For example, the Cyber Monitoring Centre (CMC) said the impact of incidents experienced by retailers Marks and Spencer (M&S) and Co-op in 2025 was somewhere in the region of £270m to £440m.

The same body estimated, in October 2025, that the cyber incident which halted Jaguar Land Rover’s (JLR) operations caused a financial impact of £1.9bn and affected more than 5,000 UK organisations.

This makes education key – and brokers play a big role in helping customers understand the seriousness of cyber attacks and the importance of having the right cover to mitigate the damage.

“There are some incredibly knowledgeable and well-resourced cyber experts in the broker community who are enthusiastic advocates of cyber insurance and the benefits it can offer insured clients,” John Pain, partner at Kennedys, told Insurance Times.

“At the same time, there remains an opportunity to build greater understanding among clients of the value cyber cover can provide and, where policies are already in place, how they can make the most of that protection.”

Issues with take-up

One of they key opportunities that should help brokers to address cyber coverage gaps is the current soft market.

According to Aon’s Cyber and E&O: A Soft Market Meets Rising Volatility report, published on 18 September 2026, buyer-friendly conditions continue across North America and Europe, the Middle East and Africa.

The report said that growth continues to be fuelled by first-time buyers entering the market, while established insureds are making more data-driven purchasing decisions based on quantified exposure analysis rather than legacy buying patterns.

However, Pain felt “take-up of cyber cover remains relatively low across the board”.

So, are brokers struggling to sell the product? James Livett, executive director at the London and International Insurance Brokers’ Association (Liiba), felt that brokers were confident and skilled enough to sell the product, ”given what they have available to them”.

However, Tom Draper, UK managing director at cyber insurer Coalition, said “most broking houses have quite a way to go to fully educate their teams”.

He added: “There is definitely a strong internal core of cyber specialists and there is also a very large network of experienced client-facing teams who understand their clients very well, can articulate risk – but most agencies really struggle with combining those two.

“So, the simple answer is there is still a large way to go in educating brokers.”

The other issue for brokers, according to Draper, is that initiating a conversation might be challenging as clients might not see cyber security as an insurance solution and instead talk to their IT and security team about how to deal with threats.

“One of the challenges with it is you have clients articulating risk, but not necessarily in ways that ticks insurance language boxes,” he said.

“Because insurance doesn’t seem the natural vehicle to help solve this, you rarely have a client go ‘I want to talk about cyber insurance’.”

Livett also felt that take up of cyber insurance can be a challenge, adding: “I’m not seeing many small businesses buying cyber insurance particularly unless they have to.”

He highlighted that one of the key issues is that a firm pays a certain amount of money for it, but if there is a cyber attack, it could be existential.

“There’s a disincentive for some of the small firms to buy insurance because of the cost versus the reward [being] out of kilter,” he said.

How to sell cyber

The lack of insurance take up amid favourable conditions comes as new data from PwC shows that firms are increasing cyber budgets to bolster their own defences.

Published yesterday, 1 October 2026, the figures showed 84% of surveyed security and finance leaders expect cyber budgets to rise over the next 12 months – up from 78% last year.

The survey, which captured the views of almost 4,000 business and tech executives across 71 countries and territories, also found that as frontier artificial intelligence (AI) models are rolled out, almost two-thirds (58%) of security leaders rank AI in their top cyber budget priorities for the year ahead.

So, what can brokers do to better talk about the importance of cyber cover and convince businesses to use some their budget for this?

Draper felt it was important to change the narrative “from us just being there – we’re here to be a pot of money” to actually “no, we’re really here to support UK companies”.

“We have been educating brokers for a number of years now,” Draper said.

“The aspect is making sure that the conversation with cyber, just as any other key risk, is actually had outside the standard renewal cycle.

“There needs to be a meeting that is almost a ‘look, here are things you are uninsured or underinsured for and we’d like to talk to you more about that’.

“Insurers need to help brokers have those conversations.”

Draper also felt that “one of the challenges the broker has is that many try to sell the insurance rather than the risk protection, the mitigation, the response and the various aspects of the product, which makes sense because that’s how you sell other product lines”.

However, Livett felt brokers have been looking more at the risk management advocacy piece and that “we could potentially see products coming out the back of that”.

“[Brokers are] spending far more time talking to their clients or potential clients about how they can improve their technology, how they can improve security in their own businesses,” he said.