While 78% of brokers see cyber as an area of growth for their business, almost two fifths admit to having never sold a cyber policy
Over half (54%) of brokers said that they would welcome more support from insurers to help them sell more cyber products, with nearly two-fifths of brokers (38%) never having sold a cyber policy.
This was according to Ecclesiastical’s research of 250 brokers last January and February undertaken by FWD, a research agency, which found that 78% agreed that cyber is an area of growth for their business.
Ecclesiastical found 64% of the same sample admitted they needed more training and just over a quarter (27%), said that they would not feel confident selling a cyber policy. In terms of support from insurers, marketing materials, simplified wording and more training were the most requested by brokers.
Adrian Saunders, commercial director for Ecclesiastical, said: “As part of our commitment to supporting brokers, we are currently investigating how we can help brokers have those important conversations about cyber insurance with their clients.”
Moreover, according to the Cyber Security Breaches Survey (CSBS) 2019 cited by Ecclesiastical, brokers said the biggest barriers to selling cyber was that 90% of clients believed that they did not need the cover. Other barriers included clients not understanding what the policy covers, lack of standardised policy wording and that it was too expensive.
Cyber breaches or attacks in the 12 months prior to the survey were identified by 32% of UK businesses, lower than last year which peaked at 48%. This figure increased to 60% for medium and large businesses this year. Approximately 48% of UK businesses identified one breach or attack per month.
However, the survey shows that businesses have increased their planning and defences against cyber attack since 2018. It highlighted that GDPR has had an impact in theses changes with three in 10 (30%) of UK businesses saying that they made changes to their cyber security policies or processes as a result of GDPR.
Saunders added: “There is clearly an understanding amongst business owners and managers of the need to assess and manage the risks associated with cybercrime.”
Most common types of attacks (CSBS 2019)
- 80% of UK businesses were targeted by phishing attacks
- 28% of UK businesses fell victim to others impersonating an organisation in emails or online
- 27% of UK businesses were subject to viruses, spyware or malware which included ransomware attacks
Low uptake remains
Although the uptake of cyber remains low; “according to the Cyber Security Breaches Survey 2018, just 11% of UK businesses have cyber insurance in place. This presents both an opportunity and a challenge for the insurance sector and brokers,” Saunders added.
The CSBS 2019 survey gave an indication of the level of investment being made by businesses as they look to improve security. Medium-sized businesses spent £25,100 on cyber security in 2018, but this figure increased to £277,000 for larger organisations, with 30% citing the implementation of GDPR as a driver for this investment.
“The report also demonstrates a willingness among business owners to invest in protecting their businesses against cybercrime. Cyber insurance is a vital component of managing digital risks and therefore needs to be considered alongside investment in security software, better training for staff and other security improvements. As an industry, we need to find a way to help brokers demonstrate this to clients,” he added.
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