• 76% of Hong Kong SMEs were victims of cyber incidents in the past year
• 47% of SME leaders in Hong Kong say that their employees do not recognise the severity of cyber risks to the business
• 32% of businesses did not purchase cyber insurance before or after an incident
HONG KONG, 14 October, 2019 – A survey by Chubb of Small and Medium Enterprises (SMEs) in Hong Kong SAR (“Hong Kong”) reveals a low level of confidence in their employees’ ability to manage cyber risk.
The second, annual Chubb SME Cyber Preparedness Report 2019 –‘Ignorance is Risk’ – released today, found that three-quarters (76%) of SMEs surveyed experienced a cyber incident in the past 12 months.
Despite the high number of cyber incidents, half (50%) of Hong Kong SME leaders do not think their employees are aware of all the cyber threats they face.
41% of SME leaders say there is no consistent understanding across their organisation of what cyber risk means. Moreover, 38% of SME leaders are not confident that all their employees who have access to sensitive data are fully aware of their data privacy responsibilities.
“Building awareness among employees is more important than ever. Employees are both the biggest risk and greatest opportunity for SMEs looking to improve their cyber defences. Being the organisation’s first line of defence, they can play a critical role in detecting and preventing breaches. Not investing in upskilling employees on cyber risk is a missed opportunity,” said Mr Andrew Taylor, Cyber Underwriting Manager, Chubb Asia Pacific.
The Customer Comes Last
In the wake of a major cyber incident, SMEs are most concerned about the effects on their relationships with customers (51%), but less so than in 2018 (64%). This is followed by worries around revenue and sales (49%), company profits (46%) and market reputation (46%).
Despite these concerns, after a cyber incident, more than a third (34%) of SMEs reviewed their security protection but took no future action, with only 11% making any attempt to recover breached data files.
“This apparent lack of concern is puzzling,” added Mr Taylor. “It points to the over-confidence we found among SMEs in overcoming cyberattacks. However, this leaves the door wide open for malicious attacks, future breaches and inadequate incident response.”
The Need for Speed
Positively, SMEs in Hong Kong were faster to respond to cyber incidents compared with a year ago, with 71% of businesses resuming operations within 12 hours following a cyber incident. This is a significant increase from 62% in 2018.
More than two-thirds (69%) of SMEs communicated to affected stakeholders within 72 hours, compared with 62% in 2018.
Although the study reveals that Hong Kong businesses have improved their incident response time, more than half (54%) still do not have a proper data breach response plan in place.
Insurers Have a Role to Play
While SMEs in Hong Kong are becoming more aware of cyber risks, the report shows that proactive protection measures remain largely inadequate. Nearly a third (32%) of SMEs in Hong Kong did not purchase cyber risk insurance before or after experiencing a cyber breach. Close to half (45%) do not fully understand the insurance solutions available to them.
“With SMEs making up 98% of all businesses in Hong Kong, the number of businesses covered by cyber insurance is worryingly low,” says Mr Stanley Wong, President, Chubb Hong Kong SAR, Taiwan and Macau SAR.
“There is a misconception that smaller businesses face less cyber risk than larger companies, when in fact the opposite is true. A large cyber incident could spell the end of a small business and leave them open to significant third-party liabilities. With three quarters of SMEs experiencing a cyber incident in the past 12 months, there is an urgent need for all businesses to protect themselves.”
Visit Chubb’s website for more details: chubb.com/hk-sme-cyber-report-2019-en
About the Chubb SME Cyber Preparedness Report 2019 - ‘Ignorance is Risk’
This year’s report, ‘Ignorance is Risk’, has been produced by Chubb. It is based on a survey of 1,400 respondents from Small and Medium Enterprises (SMEs) in four locations; 300 each from Hong Kong and Singapore, and 400 each from Australia and Malaysia. Respondents comprised board-level executives (82%) and senior managers or directors below board level (18%) from SMEs between 2 to 249 employees. The industries respondents belonged to are: Manufacturing (20%), Professional Services (19%), Retail & Hospitality (13%), Technology (8%), Education (7%), Financial Services (5%), Healthcare (4%), Media & Communications (4%); and other industries (20%).
Chubb is the world’s largest publicly traded property and casualty insurer. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. As an underwriting company, we assess, assume and manage risk with insight and discipline. We service and pay our claims fairly and promptly. The company is also defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb maintains executive offices in Zurich, New York, London, Paris and other locations, and employs more than 30,000 people worldwide.
With both general and life insurance operations, Chubb has been present in Hong Kong SAR for more than 90 years via acquisitions by its predecessor companies. Its general insurance operation in Hong Kong SAR (Chubb Insurance Hong Kong Limited) is a niche and specialist general insurer offering products such as property, casualty, marine, financial lines and consumer lines designed for large corporates, midsized commercial & small business enterprises as well as retail customers. The AA- long term insurer financial strength and counterparty credit ratings by Standard & Poor’s are indicative of the company’s strong capitalisation. Over the years, the company has built strong client relationships by offering responsive service, developing innovative products and providing market leadership built on financial strength.
More information can be found at www.chubb.com/hk.
Chubb Insurance Hong Kong Limited
T: +852 3191 6866
T: +852 2140 6022