COVID-19 increases cyber risks but creates grounds for growth: Study

COVID-19 has highlighted the challenges faced by those in the cyber insurance market, but there is still a considerable opportunity to grow the market despite the changing risk landscape, according to GlobalData.

GlobalData’s 2019 UK SME Insurance Survey indicates that only 18.8% of SMEs held a standalone cyber insurance policy. With SMEs accounting for over 90% of the total number of businesses in the UK, there is clearly considerable potential to grow the market, and the new-found reliance on remote working among many businesses will create the opportunity to accelerate this growth.

GlobalData senior insurance analyst, Daniel Pearce, commented: “Social distancing measures have resulted in many businesses transitioning to a remote working approach, which has the potential to increase their exposure to cyber risks. There is an opportunity to increase the uptake of cyber insurance following the sudden growth in remote working and increased reliance on technology. However, there has also been a considerable increase in the risks faced by insurers, as employees’ systems are now spread out across more locations and networks with different security levels.

“The increased cyber risks that remote working brings to the market will undoubtedly be a deterrent for new cyber insurance entrants. Yet, for those that are willing and able to mitigate the increased level of risk, the demand for cyber insurance has the potential to be greater than ever, with remote working practices expected to be in place for a while – and some potentially becoming permanent – as businesses begin to adapt to a new normal.”