Cybersecurity risk becomes business leaders top concern

Cybersecurity is rising as a concern for business leaders, and more companies are getting cybersecurity insurance coverage, according to the latest annual Travelers Risk Index released September 24.

Based on a survey of more than 1,200 respondents, 62% said they worry some or a great deal about cyber risks, passing last year’s top concern, medical cost inflation, which ranked highest for 59% of respondents this year. The percentage of respondents who now have cyber risk insurance was 65%, up from 60% last year. In 2018, 39% said they had this coverage.

Tim Francis, enterprise cyber lead, Travelers

“We saw an increase back in 2019-20 when we started seeing an increase in ransom claims,” said Tim Francis, enterprise cyber lead at Travelers, in a media briefing. “Why isn’t it 100%? There’s a lot of factors that go into that. I think that’s partly because in cyber insurance, it isn’t mandatory. Other types of insurance are — auto insurance and property insurance.”

With 30% of respondents saying they have no cyber risk insurance, small businesses were less likely than medium and large-size companies to have coverage. Small businesses reporting they have coverage did increase from 34% in 2023 to 41% this year. Mid-sized companies increased to 77% from 74%; and large businesses rose to 78% from 72%.

“Cyber is still a relatively new type of insurance, and a lot of owners of businesses may not have really had a conversation about cyber insurance,” Francis said. “They’re concerned about cyber risks. They have some awareness of that. They may not be aware of cyber insurance. They may think cyber insurance is something that only large companies buy, or only financial services or health care companies buy. None of that’s true – there are cyber insurance products for virtually any industry, any size company, and they are priced appropriately for the exposures.”

Slightly more businesses said they had a cyber incident, increasing from 23% in 2023 to 24% this year. More than half of those, however, said they had an incident within the past year. Travelers also asked those surveyed about their top cyber risk concerns. Ransomware was the top concern, at 54%, followed by employees unauthorized or unsafe computer activity at 53% and system glitches, also at 53%.