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SMEs vulnerable to cyber attacks – GlobalData

16th June 2022 - Author: Daniel Jackson

Many SMEs will leave themselves exposed to cyber risk in 2022 due to high insurance premiums and the cost-of-living crisis, according to a new survey by GlobalData.

cyber securityThe research found that 17.3% of SMEs did not have cyber insurance in 2021 due to it being too expensive, while 29% had cancelled their policy to cut costs.

Smaller businesses were found to be most exposed to rising costs, as only 21% of micro businesses had cyber insurance, compared to 40.1% for small businesses and 54.3% of medium businesses.

Ben Carey-Evans, Senior Insurance Analyst at GlobalData, said: “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.”

“Businesses and consumers have been hit hard by the cost-of-living crisis, with sky-high fuel and energy prices leaving consumers with a smaller disposable income to spend. GlobalData expects the number of businesses cancelling their cyber insurance policy to only increase this year.”

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The war in Ukraine and employees continuing to work from home has increased the level of cyber risk to businesses in the UK, so insurers cannot respond to the cost-of-living crisis by lowering premiums.

According to GlobalData’s report, innovation will be needed to counter the continuously evolving cyberthreat landscape, which includes the fallout from the Ukraine-Russia conflict.

According to GlobalData estimates, the global cybersecurity industry will grow from $125.5 billion in 2020 to $198 billion in 2025.

The survey looked at 2,001 businesses ranging in size from 1 to 249 employees.

David Bicknell, Thematic Analyst at GlobalData, said: “No one—not even security providers themselves—is safe from attack. Today’s always- connected world offers a myriad of opportunities for cyberattackers to disrupt countries, organisations, and individuals. A challenging worldwide geopolitical environment exacerbated by the COVID-19 pandemic—and, since February 2022, the Ukraine-Russia conflict—has gifted cyberattackers an uneven playing field, which they are actively exploiting.”

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