A survey from the Nationwide Agent Authority, a provider of diversified insurance and financial services, revealed that most of the businesses and consumers in the U.S. are not prepared to defend against evolving cyberthreats. The survey uncovered four scenarios in particular, these include:
1. Small Businesses are Underprepared
Nearly 50% of cyberattacks are aimed at small businesses, but only 37% of small business owners reported believing they are at risk to fall victim to a cyberattack. About one-third of businesses said they are not confident they could recover if their business was attacked.
While 50% of small business owners believe they are prepared to handle a cyberattack, only 39% of independent agents believe that their customers are prepared to prevent one. Only 17% of small business owners say they have cyber liability insurance, and half (53%) say they do not offer cybersecurity training to their employees. Eight in 10 agents admitted that most of their clients are unsure of how they are exposed to cybersecurity risks and they do not know what is covered in a cyber insurance policy.
2. Middle Market Businesses have Better Cyber Footing
According to the survey, the middle market businesses have a greater awareness and are more prepared for cyberattacks compared to small businesses. Though 70% of middle market business owners are concerned about cyber risks, over 79% said they are confident and well prepared to address cyberattacks.
“This confidence may be warranted as they are more likely than small business owners to have taken key security precautions, including purchasing cybersecurity insurance (71%). They also appreciate the support they are receiving from agents, with 70% indicating they trust their agent to provide insurance council on cyberthreats,” the survey stated.
3. Consumers Underrate their Cyber Risk Exposure
The survey found that consumers have limited knowledge of cyberthreats. Around 40% of consumers stated that they have never been a victim of any kind of cyberattacks. It is also observed that consumers are unaware of what it takes to recover from an attack, with just 51% believing they could recover. Four in 10 do not know how much it would cost to recover from a cyberattack. Only 62% reported being knowledgeable about ID theft, 56% stated they know about malware, and only 57% know about phishing attacks. While 32% said they feel prepared to protect themselves from evolving threats, only 13% of consumers indicate that they are cyber insured.
4. Cyber Insurers Help Clients with Evolving Cyberthreats
The survey stated that insurance agents can make their clients aware of evolving cyber risks, with 52% of agents surveyed said they discuss cybersecurity threats with their customers often. Over 50% of agents said they are familiar with emerging cyberthreats, including 58% – IoT security breaches, 58% – Mobile point of sale malware, 53% – Denial of Service (DoS) attacks, and 47% – Deep fake attacks.
“It is encouraging that middle-market business owners appear to be more attune to risks and are proactively preparing their defense. But regardless of the type of client, now is an important time for insurance agents to talk to their customers about cybersecurity solutions and best practices,” said Catherine Rudow, Vice President of Cyber Insurance for Nationwide.