The UK’s small businesses are increasingly being priced out of cyber insurance policies, due to sky-high premiums and the cost-of-living crunch.
Almost a third (29 per cent) of companies with fewer than 250 staff cancelled their cyber insurance policies last year, as part of efforts to cut costs, research from GlobalData shows.
A further 17.3 per cent of small and medium enterprises (SMEs) never had cyber insurance policies in the first place, with smaller businesses most likely to be uncovered.
The situation comes as the global pandemic and the war in Ukraine have increased the risk of hacking, meaning insurers are unable to lower premiums in response to the UK cost-of-living crisis.
While working from home has created new opportunities for hackers, the Ukraine conflict is expected to see Russia unleash its hacking capabilities on the West.
GlobalData insurance analyst Ben Carey-Evans 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.”
The analyst said the situation is likely to see an increase in “the number of businesses cancelling their cyber insurance” policies.
Nonetheless, GlobalData forecast the worldwide cybersecurity market will grow significantly over the next few years, due to the rising threat.