MGA issues cyber warning as businesses ’underestimating’ vulnerabilities

Just 47% of UK and Irish businesses have cyber insurance, despite being more likely to be the target of cyber attacks than to suffer flood damage.

This was according to a survey released by Pen Underwriting, which also revealed that only 18% of firms with less than £1m turnover per year had cyber cover in place.

This is despite 39% of respondents being the target of a cyber attack in the past five years, with 74% of that number reporting the attack had caused both commercial disruption and financial loss.

In contrast, 35% reported being the target of theft, 10% reported fire damage to their properties and only 7% reported flood damage.

Warning

The survey polled 300 insurance industry professionals in the UK and Ireland between 29 January 2025 and 12 February 2025.

It also found that 90% of respondents believed themselves to be protected against potential cyber attacks, while 81% were confident they could recover quickly in the event of one.

However, Ian Summerfield, head of cyber at Pen Underwriting, said: “Our concern that businesses are underestimating their vulnerability to systems breaches, data loss and potential exfiltration by cyber criminals, while over-estimating their cyber security and resilience, is given weight by this research.

“The frequency of cyber attacks and subsequent loss and disruption is significantly higher than the occurrence of other perils that firms look to insure against as standard, such as physical theft, fire and flood.

“And yet the fact that only 47% of all businesses in the UK and Ireland take out dedicated cyber insurance – a number that falls to 18% for the smallest businesses – points to a disconnect between perceived cyber risk and reality.

”In our view, cyber risk is as fundamental to every cover conversation between businesses and their insurance brokers as property and liability.”