Businesses are struggling to understand cyber insurance
Around two-thirds of independent agents said their business clients are at least moderately concerned they could experience a cyberattack.
The FBI’s Internet Crime Complaints Center (ICCC) reported cybercrime losses hit $6.9 billion in 2021, an increase of around $2.7 billion dollars from cyber losses in 2020. This number has ticked upward steadily year-by-year from a reported $1.4 billion in 2017. Even with these rising losses, however, many insurance agents are still struggling to get their clients to fully understand cyber insurance.
According to a Nationwide 2022 Agency Forward Survey, 83% of insurance agents said most of their clients believe the chance of becoming the victim of a cyberattack is small, and 73% stated they aren’t even sure their clients are aware cyber risk coverage exists. Despite businesses’ lack of knowledge about cyber insurance, 67% of independent agents and 69% of commercial lines agents surveyed said their clients are at least moderately concerned their business could experience a cyberattack. Only 7% of independent agents reported their clients were not concerned at all about cyber threats.
More than half of these agents also said one of the biggest motivating factors for their clients deciding to purchase cyber insurance is witnessing a similar business suffer a cyberattack. Many also cited growing interest in cyber coverage amongst their clients because of articles in the news about attacks.
One-thousand customers in the U.S. were also included in the survey, and they reported being worried about how the companies they do business with are preparing for possible cyberattacks; with 76% telling Nationwide they would quit patronizing a company if it was responsible for a data breach that personally impacted them.