Why a third of Singaporean SMEs don’t use cyber insurance

Amongst those without coverage, half considered purchasing a policy.

Singapore small and medium enterprises (SMEs) are increasingly aware of cyber risks but remain hesitant (68%) to purchase cyber insurance, revealed QBE Insurance’s Singapore SME Survey.

Furthermore, findings show a decline in SMEs' understanding of cyber risks, with only 40% considering themselves fully informed, down from 47% last year. 

Meanwhile, the number of businesses experiencing cyber incidents has risen slightly from 25% to 27%. 

Despite this, cyber insurance adoption has dropped from 38% to 36%. 

Amongst those without coverage, 51% would consider purchasing a policy, whilst 15% rule it out entirely, citing cost, lack of data storage, and perceived low impact of cyber events.

QBE Singapore's head of Underwriting, Retail & SME, Shun Quan Goh, acknowledged the reluctance but emphasised the growing need for risk mitigation tools. 

He noted that increased reliance on technology makes cyber insurance a crucial safeguard, even as SMEs prioritise cost control.

Whilst offline channels remain dominant, preferred agent use has risen to 29%, whilst broker and bank usage declined. 

Online-direct insurance purchases increased to 22%, whilst aggregator usage dropped to 13%. 

Additionally, 73% of SMEs prefer customised insurance packages covering multiple business risks rather than individual policies.

QBE Singapore CEO Ronak Shah underscored that businesses continue to favour an omnichannel approach, combining human interaction with digital access. He added that as AI transforms industries, SMEs must adapt by upskilling employees rather than replacing jobs outright.

The survey was conducted between December 2024 and January 2025, gathered responses from 600 decision-makers on key business risks, including artificial intelligence and insurance digitalisation.