CFC says there is “a growing disconnect between AI integration and AI readiness” among SMEs, and the challenge for cyber insurers is “converting awareness into resilience”.

Nearly half of 500 Australian SMEs surveyed by the specialist insurer list cyber as their biggest risk, and 70% have experienced a cyber event in the past three years.

SMEs are “paying attention – they’re concerned about cyber risk and they’re ready to have the conversation. The opportunity now is to make that conversation more relevant, practical and meaningful. No group is better positioned to do that than brokers,” CFC global head of cyber James Burns said.

Head of global cyber development Lindsey Maher says while awareness of cyber risk has grown, many businesses still underestimate the threats most likely to affect them and remain unclear about the support insurance can provide before, during and after an incident.

Only 30% of more than 2000 SME leaders surveyed across the UK, US, Canada and Australia identify ransomware, phishing and social engineering as a major threat, and just 28% recognise human error as a significant risk.

Yet CFC data shows ransomware accounts for 64% of cyber claims costs and human error contributes to 75% of cyber claims.

More than two-thirds of respondents did not realise cyber insurance includes proactive cybersecurity, incident response support, and legal and regulatory help, and that it covers incidents related to human error.

“For brokers, that presents a real opportunity,” Ms Maher said. “Clients are looking for guidance, not just a quote. By helping businesses better understand their exposures and the services available to support resilience and recovery, brokers can play an important role in closing the gap between awareness and action.”

She recommends simpler conversations about what cyber insurance does and more focus on outcomes rather than terminology. “Better explanation of the services available before and during an incident and much closer alignment between the risks SMEs believe they face and the solutions our industry offers.”

See ANALYSIS.