While UK small businesses are increasingly aware of the risk of cyber attack, and say they view insurer’s records on sustainability as important, it is cost that overwhelmingly influences the choices SMEs are making. The findings, from GlobalData’s 2022 UK SME Insurance Survey, indicate the effects of soaring inflation and fears of a sustained recession in the UK.

GlobalData questioned 2,000 SMEs in the third quarter of 2022 and found that close to a third of them, 32.7%, felt the risk of cyber attack had increased since the pandemic. But cyber insurance penetration remains low, with only 56% of medium-sized businesses, 40% of small businesses and 17% of micro-businesses having policies in place.

Despite a number of recent high-profile attacks, most notably on Revolut and Holiday Inn, 62% of those surveyed did not feel there had been a significant increase in risk.

Cost the key

The survey also asked SMEs to rank the factors they saw as important when choosing a policy. Cost was ranked the number one consideration by 25% of respondents – double the number who chose the second factor, reputation.

Sustainability came ninth in the list of 10 factors SMEs were asked to rate, with just 4% ranking it number one. Interestingly, when the same sample was asked to rank the importance of an insurer’s record on sustainability, 63% ranked it as the most or second most important factor.

Ben Carey-Evans, Senior Insurance Analysts at GlobalData, said: “Sustainability is a growing trend in the industry… yet high inflation and cost-of-living crises… will make factors around price, payouts and trust even more important”.

Those concerns over basic considerations around cost may also provide cyber criminals with fertile ground as SMEs are forced to strip back.