Many Small Businesses Not Familiar With Cyber Insurance: Celent

The cyber insurance market continues to expand—hitting $3.6 billion in direct written premiums in 2018, according to NAIC data—but awareness of the coverage still has room to grow, says a new Celent report.

While 75 percent of middle-market companies surveyed by Celent for its “Voice of the Cyber Insurance Buyer” study said they were familiar with cyber insurance, the majority of small businesses (61 percent) were not.

Size also seems to play a role when it comes to purchasing coverage: 69 percent of midsize respondents said they have cyber insurance compared to only 19 percent of small businesses.

Travelers was the most frequently mentioned answer in both segments when participants were asked to name their current cyber insurance providers. Surprisingly, about 12 percent of respondents said they did not know the name of their insurer.

Among the survey’s other findings:

• 58 percent of respondents reported at least one cyber attack in the previous 12 months, with at least one company experiencing six attacks during that time.

• 61 percent of the midsize businesses with coverage purchased a standalone cyber policy compared to only 36 percent of small businesses. On the other hand, 41 percent of small businesses have cyber coverage bundled with their business owner policy (BOP) versus 19 percent of midsize businesses.

• Respondents said they were most likely to select their insurer for cyber coverage based on the advice of an agent/broker (39 percent) or an existing relationship with an insurer (24 percent).

• The vast majority of respondents would prefer working with an agent/broker when purchasing cyber insurance. Only 19 percent indicated they would purchase a standalone cyber policy online. However, age of the buyer makes a difference, as 41 percent of small business respondents under the age of 55 said they were likely to buy the coverage online.

Celent partnered with Slice Labs and Barlow Research Associates Inc. for the survey of more than 400 small and midsize businesses to get insights into the cyber insurance market. The survey looked at buyer awareness and motivations, perceived value of existing products, and purchasing experience.