More than half of SMEs in Singapore, Hong Kong and Australia have experienced a cyber incident in the past year, a survey reveals. On average, a large majority of firms are not aware of all the cyber threats they face.

Property and casualty insurance company Chubb released a survey of Small and Medium Enterprises (SMEs) in some Asia Pacific countries which revealed a significant perception gap between cyber risk and how well they are prepared to deal with it. The report «Too Small to Fail?» of 1,000 SMEs across Singapore, Hong Kong and Australia, reveals that:

  • Most respondents believe they are in a better position than their larger competitors to manage a cyber incident (63 percent in Singapore, 60 percent in Australia and 52 percent in Hong Kong); yet
  • The majority of SMEs have experienced a cyber incident in the last 12 months (71 percent in Hong Kong, 60 percent in Australia, and 56 percent in Singapore); and
  • The majority of cyber incidents resulted from internal factors such as system breakdowns and human error.

Risk and Reality

While many SMEs feel better prepared than larger companies to manage cyber incidents, smaller companies have a relatively larger exposure, as they face the same risks as larger businesses but do not have the same means to implement comprehensive protection, leaving significant risk uncovered.

«The survey results are consistent across the three markets. Many SMEs believe they are too small to be targeted by cyber criminals or that any internal issues will not greatly impact them. In effect, they think they are ‹too small to fail›. However, our own claims data highlights numerous small business compromises and ransomware events that are decimating the cash flow of small businesses,» said Andrew Taylor, Cyber Underwriting Manager, Chubb Asia Pacific.

The Top Three Cyber Incidents in the Past 12 Months Were:

1. Business interruption from system malfunction or technical fault;

2. Data loss through a system malfunction or technical fault; and

3. Business interruption or data loss through human error, such as a lost or stolen memory device or employees unintentionally exposing their company data to risk.

Cyber Insurance – Lack of Understanding

The survey also uncovered a lack of understanding of cyber insurance with around 57 percent of SMEs in Singapore, Hong Kong and Australia not fully understanding the insurance solutions available, while 61 percent have never purchased cyber insurance.

«Clearly, there is a need for more education about the value of cyber insurance,» said Tim Stapleton, Senior Vice President, Cyber & Technology, Chubb Overseas General. Chubb is the world's largest publicly traded property and casualty insurance company. With operations in 54 countries and territories, Chubb provides all sorts of insurances.

The firm maintains executive offices in Zurich, New York, London and other locations, and employs approximately 31,000 people worldwide.