Small and medium enterprises more likely to adopt cyber insurance

Smaller and medium sized companies are more likely to spend on cyber insurance than their larger competitors according to a new report.

The study from US cyber insurance specialist Cowbell Cyber finds 65 percent of SMEs are planning to spend more on cyber insurance as part of their resilience plan in the next two years, compared to 58 percent of large companies.

The report also finds that 70 percent of SMEs have a cyber coverage limit lower than $1M and lower than total past or estimated future losses and expenses related to a cyberattack. Coverage limits vary across industries, with the report finding that life sciences, healthcare, retail/hospitality, and telecom are severely under covered with the biggest gap between limit and expected losses.

"Cyber breaches are no longer an 'if' scenario but rather a 'when' scenario. Our analysis of the survey results show that cyber insurance is becoming increasingly popular for SME organizations that want to protect their assets and accelerate the response and recovery process in the aftermath of a cyber incident," says Isabelle Dumont, VP of market engagement at Cowbell Cyber. "Cyber insurance is now a necessity and not a luxury for organizations. At Cowbell Cyber, we offer clarity and flexibility in the cyber coverages offered, keeping the unique needs of each policyholder in mind."

Among other findings, SMEs and large enterprises are in agreement on the likelihood of their business experiencing a breach over the next year at 44 percent. 65 percent of SMEs are generally satisfied with the return on investment they get from cybersecurity insurance. On average, organizations opt for cybersecurity insurance coverage limits of about 0.14 percent of their revenue.

Cyberattacks using password and credential reuse are the greatest cause losses today and seen as a significant risk over the next two years. 55 percent of SMEs point to employee-owned end-user devices as the highest risk. Multi-factor authentication is still significantly under-deployed in SMEs at 18 percent compared to very large enterprises where 43 percent use the technology.

The full report is available from the Cowbell Cyber site.

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