Despite rising cyber threats and AI adoption, Singapore’s cyber insurance uptake among SMEs is on the decline. A recent QBE report found that just 36% of Singapore’s SMEs report having any cyber coverage, down from 38% last year. At the same time, cyber incidents rose, and awareness of cyber risks fell from 47% to 40%. This mismatch raises concerns about whether SMEs are prepared for the digital risks that come with innovation.
QBE’s report reveals that awareness of cyber risks is in decline, yet incidents are creeping up. It’s a paradox, like knowing your roof leaks more every year but choosing to patch fewer holes. One reason for this. Businesses are often prioritizing cost control, an understandable choice. But this short-term saving might have longer-term consequences.
The Human Touch Still Matters
In the insurance landscape, omnichannel experiences remain king. Despite growing digital options, most SMEs still prefer offline channels for buying insurance. The use of agents rose from 27% to 29%, while brokers and banks saw declining usage.
Ronak Shah, CEO of QBE Singapore, “SMEs continue to embrace an omnichannel buying experience underscores how policyholders acknowledge that the future of conducting business is humans harnessing technology – transforming both insurance and customer experiences, and the risks as well as benefits associated with its usage.”
Of interest, 73% of SMEs prefer bundled insurance solutions, policies that cover multiple business risks, rather than single-risk policies. This indicates a desire for simplicity and convenience. Still, many still leave out cyber coverage, which may prove to be a crucial omission.
The AI Digital Risk Conundrum
AI adoption is on the rise, with 52% of SMEs stating it has significantly improved productivity. Still, there’s growing anxiety:
- 68% now fear AI will replace jobs (a dramatic jump from last year’s 17%).
- 66% have privacy concerns.
- 51% fear AI-related security breaches.
Companies are excited about AI’s promise but fear its unintended consequences. Yet, they’re under-prepared for the cyber risks that accompany this transformation.
Future-Proofing Through Insurance?
The QBE survey sends a clear signal — the cyber insurance gap is growing even as risks intensify. With rising costs, inflation, and AI shifts, SMEs need more than just optimism; they need action plans.
As AI continues to evolve, so too will the threats. Insurance, tailored to modern risks, can be the life jacket SMEs didn’t know they needed until it’s too late.
Questions and Answers:
- Why are fewer Singapore SMEs purchasing cyber insurance? Many cite cost, limited data storage, or a belief that cyber threats won’t affect them directly.
- Has the number of cyber incidents increased? Yes. Reported incidents rose from 25% to 27% year-over-year.
- Are SMEs aware of the risks of AI? Yes. 68% worry about job loss from AI, and 66% express privacy concerns.
- What are SMEs doing to manage business challenges? They’re adopting AI, cutting costs, diversifying customers, and streamlining operations.
- How many SMEs feel informed about cyber risks? 40%, down from 47% a year earlier.
- What channels do SMEs prefer for insurance? 65% prefer offline options, mainly through agents, with a growing preference for bundled insurance products.
