Cyber policy cancellations on the rise
20 June 2022
The Russia-Ukraine war has “gifted” cyber attackers an uneven playing field, yet at the same time cyber policy cancellations are likely to rise this year as living costs rise, GlobalData says.
The war, and employees continuing to work from home, has increased the level of cyber risk to businesses, so insurers cannot respond to the cost-of-living crisis by lowering premiums. This will make cover even more unaffordable for many small and medium enterprises (SMEs), the UK-based research group says.
“GlobalData expects the number of businesses cancelling their cyber insurance policy to only increase this year,” analyst Ben Carey-Evans said.
Many SMEs will leave themselves exposed to cyber risk in 2022 as “sky-high” fuel and energy prices leave consumers with a smaller disposable income.
Research indicates 17% of SMEs did not have cyber insurance last year due to it being too expensive, while 29% cancelled their policy to cut costs. Smaller businesses were most exposed to rising costs, as only 21% of micro businesses had cyber insurance, compared to 40% for small businesses and 54% of medium businesses.
“With SME budgets being squeezed, and insurers not being able to lower the costs of premiums, the rising costs will be a big issue for cyber insurers going forward,” Mr Carey-Evans said.
GlobalData’s Cybersecurity – Thematic Research report says innovation will be needed to counter the continuously evolving cyberthreats, and it estimates the global cybersecurity industry will grow at a compound annual growth rate of 9.5% to $US198 billion ($285 billion) in 2025.
“No one—not even security providers themselves—is safe from attack,” analyst David Bicknell said, adding a challenging worldwide geopolitical environment exacerbated by covid has “gifted cyber attackers an uneven playing field, which they are actively exploiting.”
“Things are bad out there and they’re unlikely to get better anytime soon.”