26 May 2020
Posted in Insurance
Cyber insurance becomes the new norm with spike in online sales in the UK, says GlobalData
With majority of the brick and mortar retail shops closed due to COVID-19, online sales have become the new norm in the UK with its demand increasing, making cyber cover one of the few methods of growth in the insurance market, says GlobalData, a leading data and analytics company.
Food and groceries sales are thriving during the government-imposed lockdowns. In the UK, number of grocers, including Ocado, Sainsbury’s and Waitrose have had to expand their delivery services to cope with the growing online sales.
According to GlobalData, the online grocery sector is forecast to account for 8.4% of the grocery sales in 2020 and generate an additional £1.8bn (US$2.22bn) more than what was previously expected. Across the entire retail industry, online sales are expected to grow at a faster rate than offline sales over the next four years.
Yasha Kuruvilla, Insurance Analyst at GlobalData, comments: “As online sales have become increasingly popular, businesses will face greater cyber risks. Retailers will hold more digital records of sensitive personal information, including payment details, than ever. According to a report from Shape Security, hackers account for more than 90% of login traffic on e-commerce websites.”
Insurers may also see an uptick in fleet motor and van policies. Companies will have to scale their delivery capabilities to meet demand by expanding fleets, which could see expansions in such policies.
Kuruvilla concludes: “This may not translate into new policies for large retailers that are more likely to already have cyber and fleet insurance products in place. However, some SMEs have explored the online channel in order to generate some sales during the lockdown. With online sales increasing in popularity, it is likely that some of these SMEs will make online sales a lasting feature, opening the door for new insurance policies to be sold.”