Cutting cybercrime in SMEs
Insurers can help to educate small and medium sized enterprises (SMEs) about the risks of cybercrime, according to data analysts GlobalData.
With cybercrime becoming more sophisticated – and the consequences more severe – GlobalData advises that it is key to educate SMEs, as many do not have specialist cybercrime knowledge.
Daniel Pearce, financial services analyst at GlobalData, commented: ‘‘This makes SMEs an ideal target for criminals, as the required sophistication of the attacks is minimal when compared with those carried out against large businesses. Yahoo and Equifax have both been victims of high-profile hacking cases in recent months, which demonstrates the challenge for SMEs, as even companies with specialist IT departments are susceptible.’’
GlobalData’s recent analysis found that the take-up of cyber cover among SMEs has stalled after a few years of growth, and industry experts have noted that it remains difficult to market the product to businesses. The analyst points towards emerging risks and niche markets specialist CFC Underwritings’ approach to cyber risks – the company’s new educational software, developed in partnership with Cyber Risk Aware, allows employees to experience a number of different styles of phishing emails, whether these are templated versions of ‘known-to-work’ phishing emails or customised to replicate the style of emails the business typically receives. CFC Underwriting estimates that approximately 38 per cent of the claims it incurred in 2016 could have been prevented by educating staff on how to deal with cyber risks.
Pearce added: ‘‘The partnership between CFC Underwriting and Cyber Risk Aware could represent a shift in the cyber insurance market, with insurers looking to take preventative measures by working alongside SMEs to educate staff rather than simply reacting post cyber-attack. There is also potential for such training to assist with the accuracy of premium pricing. Cyber Risk Aware provides feedback for businesses on the performance of employees; this in turn could be utilised by insurers to identify SMEs that are high risk and price premiums accordingly.’’