Preparation is high, with 92% of risk managers saying their company is prepared to recover from an attack, and 86% having a cyber incident response plan in place. However, 32% report their company lacks a dedicated cyber insurance policy, citing management's failure to recognize its value.

“As digital threats grow, a single cyberattack can cripple entire systems in minutes,” said Tim Nunziata, VP and head of Cyber Risk for Nationwide Excess and Surplus/Specialty. “While prevention and employee training are critical, they’re not always enough. Companies need robust cyber insurance to ensure financial stability after an attack.”

Top Risks for Large Businesses
Risk managers identified their biggest risks as IT and cybersecurity risks (50%), compliance and regulatory issues (47%), and criminal activity like fraud or vandalism (40%). When elaborating on their cyber concerns, 56% cited the rising frequency of attacks, 52% pointed to the growing threat of generative AI, and 32% noted inadequate employee training.

Additionally, 90% agreed that scams or fraud attempts that use generative AI have become increasingly sophisticated over the past 12 months, while 78% said they need more resources to protect against AI-driven attacks. Established cyber threats such as data breaches (32%), ransomware (21%), and phishing (13%) also continue to concern risk managers. More than a quarter (27%) also reported experiencing business email compromises in the past three years.

Challenges in Cyber Defense
Though virtually all risk managers (99%) believe cyber insurance is important, only 68% report that their company has coverage. Of those without coverage, 40% believe their current cybersecurity software is sufficient, 32% say management doesn't see the value, and 26% haven’t had it recommended by their broker.

Risk managers also face challenges in collaborating with other departments on cybersecurity due to varying levels of awareness and inconsistent terminology, leading to inadequate preparation across organizations.

A Role for Brokers
With 62% of risk managers reporting their company has experienced a cyberattack in the past three years, and 25% in just the past 12 months, brokers have a strong case to advocate for comprehensive cyber insurance. Among those attacked, 78% said the event disrupted operations and 74% experienced negative business impacts. Recovery for most took between one and six months, with 65% reporting that they’ve updated their policies in the past two years, mostly to increase coverage or limits.

“Cybersecurity is no longer just an IT issue—it’s a critical business priority,” said Nunziata. “Brokers can help risk managers make the case for comprehensive cyber insurance to mitigate financial impacts and ensure swift recovery. It’s not a matter of if an attack will happen, but when. The right protection can make all the difference in those moments.”

Learn more about Nationwide’s cybersecurity solutions for corporations here.

 Generative AI and deepfakes driving consumer fears, especially among older generations 
While most consumers are fearful of falling victim to identity theft, they are especially concerned about the misuse of AI for identity theft (86%) – specifically AI-generated deepfakes (73%). AI-related identity theft is a universal worry, but older adults feel more vulnerable to these emerging technological threats.  

• 92% of Baby Boomers express anxiety about AI-assisted identity theft.  
• Gen X follows closely behind at 86%, while Millennials (81%) and Gen Z (76%) show slightly lower but still significant levels of concern.  

Their concerns are valid as 18% report they have been targeted by AI-generated deepfakes or know someone who has, highlighting the evolving and pervasive nature of cybercrime in today's digital landscape.  

 “It’s no surprise that Americans are nervous about Generative AI getting in the hands of criminals looking to steal their identity,” says Rachel Bush, Vice President of Technology Business Risk at Nationwide. “As cybercrime continues to evolve and AI-assisted attacks become more sophisticated, it is crucial for consumers to stay informed and take proactive measures to protect themselves.” 

 Cybercrime is hitting closer to home for many U.S. consumers. 

• The survey found that 52% of consumers typically encounter threats via spam phone calls, while 47% face threats through personal email.  
• 41% of consumers report being affected by identity theft or knowing someone who has.  
• 33% have been notified that their personal data was in a company’s data breach, within the past 12 months. 

Consumer concern is overridden by complacency and misconception, leaving them unprotected and making them easier targets 
Despite being highly concerned, 77% of consumers also say they've accepted the risk of identity theft as a normal part of life. This attitude of resignation is leading many consumers to forgo the necessary protection needed to secure their identities.   

• Shockingly, 28% admit they have never sought more information about these threats, due in large part to misconceptions about the cost and effectiveness of identity theft coverage, leading to a dangerous gap between awareness and action.  
• These misunderstandings run deep: 
• 55% think they need a separate policy for each family member. 
• 49% are unaware of how much identity theft can damage their credit score. 
• 48% believe hiring a lawyer is necessary to recover their identity, even when covered. 
• 35% are unaware of the time required for their credit score to recover after an incident. 
• 33% do not know how long it takes to recover from identity theft.  Only 16% of consumers currently have identity theft insurance.  
• Of those without insurance, 43% believe it is too expensive, even though many are willing to spend up to $24 a month—when it actually can cost a fraction of that amount.  

“The impacts of identity theft can be far-reaching, from financial loss to reputational damage. That is why it’s vital that consumers don’t let their guard down when it comes to protecting their digital footprint,” says Sarah Jacobs, Nationwide Vice President of Personal Lines Product Development.   “Despite proactive efforts, even the most vigilant person can find themselves a victim of cybercrime. This reality underscores the importance of not just preventive measures, but also robust identity protection and recovery plans that provide early detection of suspicious activities, real-time alerts, and continuous monitoring of personal information across the dark web.”   

With effective coverage available at a low cost (Nationwide ID Theft Protection is available for as low as $4 a month), Nationwide recommends consumers reach out to their insurance agent to see what options are available to them to take control of their digital lives and protect themselves from the inevitable risks that lie ahead.    

Survey methodology: 
Nationwide commissioned Edelman Data & Intelligence to conduct a 20-minute quantitative online survey among a sample of 1,000 adult U.S. general consumers between July 26 and August 14, 2024. As a member in good standing with The Insights Association as well as ESOMAR Edelman Data and Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines. 

Despite these concerns, a new survey from Nationwide reveals a troubling disconnect between consumer awareness and action: While 80% of respondents express concern about identity theft, only 16% report having identity theft insurance, as many continue to neglect essential cybersecurity precautions that could protect them. 

Cybercrime is becoming more personal for many U.S. consumers.  
The survey found that 52% of consumers encounter threats through spam phone calls, while 47% report facing risks via personal email. Alarmingly, 41% of respondents have either been victims of identity theft or know someone who has, and 33% have been notified that their personal data was involved in a company’s data breach within the past year.  

"Cybercrime poses a profound threat to U.S. consumers, as criminals’ methods and the technology available to them evolves and improves,” says Sarah Jacobs, Nationwide Vice President of Personal Lines Product Development. “Identity no theft can devastate individuals financially and emotionally, leading to long-lasting repercussions that can hinder personal and professional opportunities. Consumers must take these threats seriously and work to safeguard their personal information and finances or insure against the possibility that their information is stolen." 

Complacency and misconceptions could be leaving consumers vulnerable to cyber threats 
Despite being highly concerned, the survey found a disturbing trend—complacency and misconceptions are leaving consumers vulnerable. The overwhelming majority of respondents – 77% – have accepted the risk of identity theft as a normal part of life. Unfortunately, only 28% admitted that they have never sought more information about cyber protection, due to misconceptions surrounding the cost and effectiveness of identity theft coverage. The most common misconceptions are: 

• 55% believe they need a separate policy for each family member. 
• 49% are unaware of the potential damage identity theft can inflict on their credit score. 
• 48% think hiring a lawyer is essential to recover their identity. 
• 35% do not understand how long it takes for their credit score to recover after an incident. 
• 33% are unsure about the duration required to recover from identity theft. 

Of the of survey respondents without identity theft coverage, 43% perceive the service as too expensive. Although cost is the top reason cited for forgoing coverage, almost half (45%) claim they would be willing to spend up to $24 a month. Closing this knowledge gap is critical to protecting digital footprints as robust protection can be secured for much less. 

"As examples of data breaches and identify theft become common, it’s understandable to see why consumers are becoming numb to this threat and accepting identity theft as a part of life,” says Rachel Bush, Vice President of Technology Business Risk at Nationwide.  “Given the increased risk, we need to break through the misconceptions surrounding identity theft coverage and emphasize that acting today is vital for protecting your financial future. Ignoring these risks can leave you vulnerable when you least expect it.” 

Deepfakes and AI-Assisted Attacks—A Widespread Concern 
The rise and misuse of generative AI and deepfakes has only intensified consumer fears. A staggering 86% of consumers are worried about AI-assisted identity theft, with 73% specifically concerned about the implications of AI-generated deepfakes. Notably, 92% of Baby Boomers and 86% of Gen X express anxiety over these emerging technological threats. However, these concerns are not just limited to older groups, as Millennials (81%) and Gen Z (76%) also report being concerned about the new threats associated with this technology.  

Their concerns are valid as 18% of respondents report they have been targeted by AI-generated deepfakes or know someone who has, highlighting the evolving nature of modern cybercrime.  

“With the rapid evolution of AI-driven cybercrimes, now more than ever, consumers must take their security seriously,” said Jacobs. “I urge everyone to connect with their insurance agents to explore the protection options available to them. These professionals are here to help you navigate this complex landscape and ensure you have the safeguards in place. Once a cyberattack occurs, it will already be too late. Don’t wait to act." 

Consumers often invest in protecting valuable physical assets like cars and homes. However, as life becomes more digitally integrated, it is equally crucial to consider digital protections like identity theft insurance. Cybercrime and AI-assisted attacks will only become more sophisticated, so it is critical for consumers to stay informed and take proactive measures to protect themselves. Identity theft coverage is not just an option—it is now essential.  

With effective coverage available at low costs, and continuous education, the time for consumers to take control of their digital lives and protect themselves from the inevitable risks that lie ahead is now.  

Survey methodology:   
Nationwide commissioned Edelman Data & Intelligence to conduct a 20-minute quantitative online survey among a sample of 1,000 adult U.S. general consumers between July 26 and August 14, 2024. As a member in good standing with The Insights Association as well as ESOMAR Edelman Data and Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines.  

More than half of SBOs (52%) also admit being personally fooled by a deepfake image or video in the past year, while 9 in 10 say gen AI scams are becoming more sophisticated and that they need help protecting their enterprises from such attacks. Though most SBOs agree that the rise in gen AI technology makes them more likely to purchase cyber insurance, less than half report actually having the necessary coverage.

“As gen AI continues to transform various industries, its misuse in scams presents a significant challenge for small businesses with less resources for cyber defense than larger corporations, making them easier targets for cybercriminals,” said Nathan Lentz, vice president of Small Commercial Sales and Distribution for Nationwide. “While small business owners feel prepared to prevent a cyberattack, they must ensure their preparedness is backed by comprehensive cyber insurance to truly safeguard their operations. Without it, they face potentially devastating consequences to their finances, operations, and customer relationships.”

Nationwide’s survey also provided three key insights for commercial lines agents and their small business owner clients:

1. Small businesses have upped their cybersecurity game, but still need help safeguarding their digital infrastructure

Small businesses have come a long way with cybersecurity since the COVID pandemic, which a quarter of owners say was a catalyst for new ways to breach their systems. Roughly 7 in 10 (69%) are worried about a potential cyberattack on their business – a 16-point increase from 2022 and 31-point jump from June 2020.

Fortunately, two-thirds (65%) of SBOs feel prepared for preventing such an attack – up 17 points from 2022. It’s likely this confidence is due to the actions they’re taking to train workers to defend against cyberthreats:

• 71% provide formal cybersecurity training for employees at least once a year (another 15-point jump from 2022)
• 36% send phishing test emails to employees at least every few months to keep them on their toes.  

However, many also may have learned their cyber lessons the hard way. Nearly a quarter (23%) of SBOs report their business has been a victim to a cyberattack and the vast majority say it jeopardized their company finances and had a moderate or major impact on their customers’ trust.

2. Business owners still vastly underestimate the cost and duration of recovery following an attack

When asked about the possible impacts of a cyberattack on their business, SBOs overwhelmingly underestimated the scope of damage a cyberbreach can bring:

• 81% believe an attack on their business would cost less than $5K in damages and recovery costs.
• Another 1 in 5 (22%) believe they’d be back up and running in a month or less.

In reality, these events can be far more detrimental to a business than SBOs realize: according to Nationwide’s claims data, the average cyber claim for a small business costs $18,000-21,000 while the time for recovery can be as long as 75 days.

3. Owners’ confidence is high, but their plans are lagging – a risky disconnect

Two-thirds of SBOs (66%) are confident in their business’s ability to recover from an attack, a 9-point increase from ‘22, but this confidence may be hubris with only 42% saying they have purchased cyber coverage – a critical backstop in the event of a malicious attack.

Perhaps most concerning, two-thirds (66%) report that they either expect their non-cyber coverages to kick in to cover losses from a cyberattack or that they haven’t taken the time to think about what they would do after an attack.

Further, 7 in 10 (69%) do report having an incident response plan in place for a potential cyberattack, however these plans are only good when they’re kept up-to-date and 3 in 10 (28%) admit theirs is outdated.

Don’t let clients lose their business to a deepfake
As clients rely more on technology and data, it’s crucial for agents to offer counsel on proactive steps they can take to protect their business from cyber criminals and bad actors.

Still, even the best efforts cannot prevent all attacks, which is why having an up-to-date incident response plan and cyber insurance is important to fall back on.

“The time for business owners to figure out how to navigate a data breach is not during the incident – that could be an expensive and potentially business-threatening lesson for owners to learn,” said Lentz. “Our research shows that three-quarters of agents (73%) say their commercial clients consider or purchase cyber insurance because they were either a victim to an attack or witnessed a similar business become a victim. As cyber threats continue to evolve, agents should encourage business owners to take proactive steps to protect their companies. Investing in the right insurance policies can not only mitigate the risks posed by cyberattacks but also ensure that recovery, when necessary, is faster, less costly, and more efficient.”

By encouraging a proactive approach that includes robust security practices, comprehensive cybersecurity coverage, and continuous education, agents can help business owners better protect themselves against the rising tide of cyber fraud.

62% of IAs polled said they are already investing in artificial intelligence technology for their business. More specifically, agents are continuing to embrace the technology as it advances, with 38% of IAs saying they have adopted an AI platform for their business in the past six months.   

“This is an exciting time for insurance agents to leverage Generative AI,” said Chetan Kandhari, Nationwide’s Chief Innovation and Digital Officer. “Today, customers are expecting a high level of responsiveness, hyper-personalization, and the ability to interact across channels. Agents are seeing where Gen AI can save them time and help them be more effective in delivering a great customer experience.”  

Insurance professionals will be looking for ways to use AI in customer service, underwriting, pricing, and sales. The benefits are so prominent that an additional 41% of agents surveyed plan to adopt AI for their business in the next six months, according to Nationwide. Furthermore, 77% reported considering using AI technology to help develop council for their clients, a 15-point jump from 2023.  

“It’s encouraging that agents are willing to incorporate AI technology to streamline their operations,” said Kandhari. “However, it’s important they use the technology in a thoughtful and responsible way, so they maximize the benefits to their business and their customers don’t see any drop off in service.”  

Nationwide offers these recommendations for agents who want to use AI in their business 

1. Clearly identify your business goals. Understanding your business objectives and pain points will help you identify areas where AI can enhance efficiency and customer experience. From there, you can research how AI is transforming your industry and look for successful use cases or emerging trends.  

2. Evaluate your current technology and choose an AI platform that will complement it. To do this, you’ll need to evaluate your needs to define the right platform to solve your business problem. Make sure you’re considering scalability and the ease of integrating the platform with your existing systems. An external vendor can help with evaluating the different platforms available, finding the one that works for your agency, and integrating it into your current system. 

3. Get employee buy-in. This will be key to ensuring your investment in AI pays off. To get employees excited and on board with using the new platform, agency owners must provide their employees robust education and training on the new platform, highlight its benefits with the staff, address any concerns, fears or misconception about using the new technology and celebrate successful uses of AI within the business.  

4. Stay vigilant. Agency owners should mandate that the technology be used responsibly and ethically. Since AI is always evolving, they should keep up to date with changing regulations governing the platform and offer up continuing education to agents so they can remain compliant. 

5. Work with carriers that have extensive experience using AI. Not all carriers are proficient with AI. Legacy carriers like Nationwide are more likely to have the infrastructure and expertise to help agents and agencies navigate the complexities of using the technology to support their customers.  

“Nationwide has been using AI and machine learning for more than a decade,” said Kandhari. “We’re standing by to guide our agent partners on the ways to best utilize this powerful tool to help grow their business and support their clients.” 

Tips and advice for agents on using AI can be found here.  

• 6 in 10 consumers are concerned about potential cyberattacks 

Top Reasons for Concern:  a perceived increase in recent cyberattacks (55%), use of Artificial Intelligence (AI) technology (54%), and proficiency of today’s hackers (51%)  

The Big Picture: Cyber threats are still top of mind for consumers, only a third (34%) of consumers feel prepared to prevent a cyberattack, and only 41% are confident in their ability to recover from a cyberattack.  

• Nearly half (45%) would hire or outsource someone to lead the recovery process if they were to fall victim to an attack, this is up +5 points from 2022 findings 

Why It Matters: 2022 had the second-highest number of data compromises in the U.S. in a single year with at least 422 million individuals impacted. 

Common Cyberattacks 
Cybercrime Familiarity: Respondents reported being most familiar with: 46% phishing, 45% malware, 44% cyber bullying; and respondents said they were not at all knowledgeable about: 54% digital unemployment fraud, 53% DoS (denial of service) attacks, 51% deepfakes, 48% digital tax fraud.  

By the Numbers: 

• 10% reported having been a victim of an attack, down -10 points from 2022 findings 
• Most common attacks reported are: 40% password attacks, 34% malware, 30% data breaches 
• Only 53% knew what to do when they identified the attack 
• Half (51%) reported an impact on their personal finances 
• Measure taken included: 58% changing passwords, 40% updated cybersecurity software, 31% purchased ID theft protection 

Most consumers who monitor their personal information or accounts do so themselves rather than using an external service—the accounts most likely to be self-monitored: 47% financial accounts, 42% emails, 39% social security—all up from 2022 findings (+13 points, +10 points, +8 points respectively). 

Interest is Increasing but Lack of Knowledge Holds Consumers Back From Purchasing Cyber Insurance 

• 15% of consumers report currently owning cyber insurance, down 1 point from 2022 findings. 

Barriers for not having it: 40% lack of knowledge, 36% lack of awareness of availability, 29% perceived costs.  

Consider This: According to the FBI’s Internet Crime Complaint Center, in 2022 there was a 5% decrease in total number of complaints reported, but dollar losses increased by 49%.  

The Bottom Line: Many consumers say the increased reliance on technology (47%), development of AI technology (47%), news about cyberattacks (47%), increased use of digital payments (46%) has made them more likely to purchase cyber insurance or expand their current coverage. 

• 3 in 4 consumers are interested in investing in resources or products affiliated with identity recovery and financial account monitoring: 
• 75% are interested in identity recovery—pays for the costs of recovering from an identity theft as well as a full-service ID theft restoration services 
• 74% are interested in payment accounts and financial accounts monitoring and activity alerts 
• 72% are interested in computer attack protection—removes malware and reprograms computers and tables, Wi-Fi routers, or other internet access points 

Key Takeaway: Having cyber insurance can dramatically shrink the cost and time it takes to recover from a cyber issue. Nationwide offers ID theft coverage for $45 a year (that is less than $4 a month) and includes cyber protection services, an identity protection portal and resolution services features—this can be added to any home or auto policy. Consumers can check with their agent to see what’s available to them and identify vulnerabilities.  

Go Deeper: Read more or watch a video about Nationwide’s ID theft protectionⁱ

ⁱ Insurance products are underwritten by Nationwide Mutual Insurance Company and affiliates. Columbus, Ohio. Subject to underwriting guidelines, review and approval. Products and discounts are not available to all persons in all states. Nationwide and the Nationwide N and Eagle are services marks of Nationwide Mutual Insurance Company. © 2023 Nationwide. 

• Concerns Are Mounting: 81% of consumers report being concerned about the risk of identity theft and 82% are concerned about the use of AI to steal someone’s identity.  

Why It Matters: The Federal Trade Commission received 5.7 million total fraud and identity theft reports, of those 1.4 million (25%) were specific to identity theft.    

The Big Picture: 74% of respondents in the survey said they think that identity theft is now a part of modern life. There is a widespread understanding that recovering your identity after it has been stolen is not a simple matter, and 82% said it would be difficult to recover.  

• Yet only 20% currently have ID theft insurance—a coverage that can be surprisingly affordable and help you sort through the steps of getting your identity back. 

Cybercrime Familiarity: respondents were more familiar with: 73% phishing, 66% fake job/lottery/prize scam, 59% website impersonation + public Wi-Fi hacking; and less familiar with: 43% form jacking, 38% QR code scam, 35% juice jacking. 

While Most Are Taking Action to Reduce Risk, Many Still Reported Unsafe Habits 

• 91% reported monitoring their financial accounts + securing Wi-Fi with strong passwords, and 88% are updating devices with security software. 

More Effort Is Needed: Fewer are going to the extra mile when it comes to protecting themselves: 48% use VPN on public Wi-Fi, 42% subscribe to an ID theft monitoring service, 22% subscribe to a dark web monitoring service. 

Vulnerabilities Reported: 54% use the same password on multiple sites, 39% use QR codes to make purchases/view menus, 37% share personal information over the phone. 

Consider This: each year 9 million Americans are impacted by ID theft & fraud with only a few incidents reported, indicating a large number of attacks go unsolved every year. 

The Big Misconceptions About ID Theft Coverage 

20% of consumers said they currently have ID theft insurance. For those who don’t: 38% don’t know enough about it, 35% think it’s too expensive, 29% think they take enough precautions to reduce their risk of identity theft. 

• 52% mistakenly believe you need separate policies for each family member 
  • Nationwide’s ID theft insurance covers the entire household under the indemnity and resolution services, with two adults having access to the Identity Protection Portal 
• 48% think you need to hire a lawyer even when you have ID theft insurance 
  • If you have Nationwide’s ID theft protection most cases can be solved through our resolution services, making it highly unlikely that you’ll need a lawyer 

The Bottom Line: There is general confusion on the perceived cost of ID theft insurance coverage—35% are not purchasing it because of what they think it will cost, yet 78% of respondents said they would be willing to spend some money on ID theft protection.

• 62% said they are willing to spend up to $49 a month on ID protection 

Nationwide offers ID theft coverage for $45 a year (that is less than $4 a month) that includes cyber protection services, an identity protection portal and resolution services features—this can be added to any home or auto policy. 

Go Deeper: Read more or watch a video about Nationwide’s ID theft protectionⁱ 

ⁱ Insurance products are underwritten by Nationwide Mutual Insurance Company and affiliates. Columbus, Ohio. Subject to underwriting guidelines, review and approval. Products and discounts are not available to all persons in all states. Nationwide and the Nationwide N and Eagle are services marks of Nationwide Mutual Insurance Company. © 2023 Nationwide. 

A recent survey from Nationwide of risk managers—those charged with identifying, evaluating, and selecting the best techniques to mitigate risk—revealed that cybersecurity takes up a substantial portion of their budgets. 68% expect these budgets will continue to grow in the coming years.

“Nationwide’s previous studies have revealed that consumers as well as small to mid-sized businesses have begun to take cyber threats very seriously,” said Tim Nunziata, Vice President of Cyber Risk for Nationwide Excess and Surplus/Specialty. “Large businesses have always been a target and that’s why many already have teams in place to protect them. As the threats become more frequent and sophisticated, risk managers know they must remain vigilant.”

Large enterprises remain concerned about cyberattacks…
Respondents believe there is a greater risk of their company experiencing a cyberattack since the beginning of the war in Ukraine (57%). 90% say they are concerned about their company falling victim to a cyberattack. But they are preparing, 91% have an incident response plan in the event of a cyberattack.

…because they know they are still on cybercriminals’ radar
68% of those who took part in Nationwide’s survey report their company has been the victim of an attack in the last three years, including almost 1 in 4 (24%) in the past year. 88% say that they’ve experienced an attack at some point in their company’s history.

Those attacks are costly…
Of those who experienced an attack nearly 7 in 10 (68%) report their business operations were impacted and three-quarters (75%) reported a significant or moderate financial impact.

…and recovery can take a while!
71% said recovery from the attack took longer than one month, and more than a third (35%) reported the process taking longer than four months.

Risk managers are on the lookout for common attacks…
They view data breaches (24%), ransomware (13%) and business interruption (11%) as the top cybersecurity threats.

…but there’s a new threat to keep an eye on
The cyberattack of the future? Deepfakes. Despite an increase in companies falling prey to deepfake attacks and even warnings from the FBI, it’s not high on the list of concerns for risk managers. Only 6% of those surveyed say social engineering, impersonation, or other tactics to manipulate employees is their biggest concern.

Companies are turning to insurance experts for help
83% report they are renewing their current cyber policy. 94% of those who did renew that policy said their broker or agent played an important role during the renewal process. Half (53%) of risk managers report their coverage has changed in the past two years, with most reporting that they’ve increased their coverage.

“Agents and brokers can really help clarify the threat landscape, including what is out there and what cyber trends they are seeing,” said Nunziata. “Where they really provide value is making sure a business has the coverage they to protect and mitigate issues.”

For more information on how to protect your company, click here.

For more information on the finding of this survey, view the complete survey results.

Methodology
Nationwide partnered with Edelman Data & Intelligence to conduct a 20-minute national online survey of 500 corporate risk managers employed by mid-sized firms, defined as reporting annual revenue of $250 million to $1.5 billion. The survey was fielded from August 8 - 25, 2022. As a member in good standing with The Insights Association as well as ESOMAR Edelman Data & Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines.

“Our survey highlights concerning vulnerabilities for consumers and small business owners, many of whom may be more focused on keeping their family or business afloat in tough times, as opposed to guarding against cybersecurity threats,” said Catherine Rudow, Vice President of Cyber Insurance for Nationwide. “It’s encouraging that middle market business owners appear to be more attune to risks and are proactively preparing their defense. But regardless of the type of client, now is an important time for insurance agents to talk to their customers about cybersecurity solutions and best practices.”

Nationwide’s research uncovered four key themes:

1. Small business owners are underprepared and overconfident
2. Middle market business owners have a better handle on cyberthreats
3. Consumers underestimate their cyber risk exposure
4. Agents are vital and can help clients understand cyber risks, including new and evolving threats

Small business owners don’t recognize cyber vulnerabilities

Nationwide’s research highlights an opportunity for agents to deliver counsel that small business owners may not know they need. Though nearly half of cyberattacks are aimed at small businesses, only 37% of small business owners reported believing they are at risk to fall victim to a cyberattack. Alarmingly, about one-third also said they are not confident they could recover if their business was attacked.

While nearly half of small business owners believe they are prepared to handle a cyberattack, only 39% of independent agents believe that their customers are prepared to prevent one. Only 17% of small business owners, or fewer than 1 in 5, say they have cyber liability insurance, and half (53%) say they do not offer cybersecurity training to their employees

Approximately 8 in 10 agents say many of their clients are unsure of how they are exposed to cybersecurity risks, they don’t know what is covered in a cyber insurance policy, they lack knowledge, and they believe the chance they can fall victim is small.

Quick tip for agents

• Make sure cybersecurity is part of your next conversation with small business clients. If they are part of the 83% without cyber insurance, bring some options to the table.

Middle market business owners have firmer cyber-footing

Nationwide’s research shows that middle market businesses, which typically have more sophisticated operations, have a greater awareness and are more prepared for cyberthreats compared to small businesses. Seven in 10 (70%) middle market business owners are concerned about a cyberattack, and 79% feel they are well prepared to address an attack. They are also confident in their ability to recover from an attack (80%).

This confidence may be warranted as they are more likely than small business owners to have taken key security precautions, including purchasing cybersecurity insurance (71%). They also appreciate the support they are receiving from agents, with 7 in 10 (70%) indicating they trust their agent to provide insurance council on cyberthreats.

Quick tip for agents

• Lean on your carrier partner for cybersecurity loss control resources to share with middle market clients and make a point to discuss changing exposures and potential coverage gaps in client conversations.

Consumers underestimate their cyber risk

Survey data showed that consumers have quite limited knowledge of cyberthreats as an alarming 40% of consumers reported they have never been victim of any sort of cyberattack, including phishing.

• About 2 in 5 consumers lack adequate knowledge of common risks.
  • Only 62% reported being knowledgeable about ID theft;
  • 56% know about malware; and
  • 57% know about phishing.

This lack of knowledge lends to poor preparation for potential cyberattacks. Only 1 in 3 (32%) said they feel prepared to fend them off and an alarming 8% reported taking zero cybersecurity precautions. Only 13% of consumers indicate that they have some type of cyber insurance.

Consumers are also unaware of what it takes to recover from an attack and just 51% believe they could recover at all. Four in 10 don’t know how much it would cost to recover from a cyberattack. Of those who did experience an attack, 30% reported that it impacted their personal finances.

Quick tip for agents

• Help personal lines clients understand the repercussions associated with a cyberattack, including the commitment of time and money. Compare and contrast that with the cost of identity theft insurance.

Agents can help clients with new and evolving cybersecurity issues

Insurance agents have an opportunity to strengthen relationships by offering effective counsel to help their clients protect against cyber risks, including several new and evolving threats that remain off the radar of most consumers and business owners. While the agents surveyed are well aware of the knowledge and protection gap, only about half (52%) say they talk to their customers often or always about cybersecurity threats.

Nearly half of agents said they are familiar with emerging cyberthreats, including:

• 58% - IoT (Internet of Things) security breaches (associated with products like Google Home, Alexa, Next, Ring, Smart TVs, smart cars)
• 58% - Mobile point of sale malware (associated with tools like Square, Clover, Toast and Shopify)
• 53% - Denial of Service (DoS) attacks (when a business’ system is intentionally shut down by a flood of traffic)
• 47% - Deep fakes (manipulated video)

Small business owners reported an even lower understanding of these emerging risks, and consumers’ understanding was dramatically lower.

A challenge may be that some agents need more education. While 84% of insurance agency principals say they provide plenty of resources to their employees, only 61% of producers and 42% of customer service reps agree, highlighting a potential disconnect between management and other customer facing representatives.

Quick tip for agents

• This is a good time to reexamine how your agency shares information with colleagues and clients about cyber risks. With nearly half of agents saying they don’t often have cybersecurity conversations with clients, there is an opportunity to strengthen relationships and drive new sales.

*These insights and more were uncovered through Nationwide’s ongoing Agent Authority research series, which includes samples of independent insurance agents, various business owners, and consumers. Previous Agent Authority research reports: Agent-customer relationship; Small business owner needs and challenges; Middle market business owner needs and challenges; Agents' top concerns through the pandemic.

Survey Methodology:
Nationwide commissioned Edelman Intelligence to conduct a 20-minute quantitative online survey among a sample of 2,600 U.S. independent insurance agents, small business owners, mid-market business owners, mid-market business owners with fleet vehicles, African American business owners, Hispanic business owners and general consumers between June 9 – June 25 to understand what business owners and consumers value when buying or renewing insurance policies, explore the different challenges each audience faces around insurance, gauge perceptions of the economy and how each audience is managing uncertainty, and find out the actions business owners and consumer have taken as a result of COVID-19 and the conversations they’re having with agents. For the purposes of this survey, middle market business owner was defined as anyone who self-reported as being a sole or part owner of a company with either 51-500 employees or $10M-$500M in revenue or 20+ fleet vehicles. As a member of CASRO in good standing, Edelman Intelligence conducts all research in accordance with Market Research Standards and Guidelines.