Hong Kong’s small and medium-sized enterprises (SMEs) are increasing their adoption of cyber insurance as awareness of digital threats grows, despite financial pressures and shifting economic confidence, according to QBE Hong Kong’s latest SME survey.
The study, conducted between November 2024 and January 2025, gathered insights from 600 SME decision-makers on key business risks, opportunities, and insurance trends.
The proportion of SMEs purchasing cyber insurance rose from 39% to 43% over the past year, with key drivers including coverage for legal services, hiring security or forensic experts, and mitigating data breach costs. QBE’s numbers track with data from reinsurance broker Guy Carpenter, who this month said that SMEs have now grown to nearly 30% of APAC cyber premiums.
Among the 62% of respondents to the QBE survey who do not have cyber insurance, 63% said they would consider buying it. Meanwhile, 11% said they would not, due to cost concerns, lack of data storage needs, or a belief that cyber incidents have a low impact on their operations. Data from Marsh shows that cyber rates are softening in Asia, which may help to drive appetite for cost-conscious in future.
“It’s heartening to see Hong Kong SMEs heighten both their knowledge as well as protection measures against cyber-attacks,” said Andex Fung, Head of SME Segment, Asia at QBE. “The interdependency across sectors and businesses makes such risks unavoidable.”
Despite this increase in cyber insurance adoption, the overall proportion of SMEs experiencing cyber incidents rose from 30% in 2024 to 33% this year.
The survey also found a decline in cybersecurity investments, with fewer SMEs implementing security solutions (down from 62% to 60%), conducting staff training (45% to 43%), or engaging cyber resilience consultants (42% to 36%). However, the proportion of SMEs hiring dedicated cyber security staff increased from 43% to 49%.
Broader insurance purchasing trends among SMEs show a shift back towards offline channels. The preference for in-person interactions increased to 68%, compared to 57% last year, while online channels saw a decline. The use of online aggregators fell from 22% to 16%, and direct online platforms dropped from 21% to 16%. In contrast, reliance on brokers and banks rose, reflecting a demand for more personalised service.
“Although SMEs’ preference for online insurance channels has declined, our survey shows that a higher percentage of SMEs are using digital platforms for key touchpoints such as research, payment, inquiries, and claims,” said Lei Yu, CEO for North Asia.
Beyond insurance, the survey highlights a worsening financial environment for SMEs. Nearly 60% of respondents cited increased costs and reduced profitability as a challenge, up from 40% last year, while about half reported difficulties with cash flow and access to funding.
Economic confidence has also weakened, with 64% expecting an improvement over the next 12 months, compared to 70% last year. Additionally, 74% of SMEs cited declining investor and customer confidence, up from 63% previously.
SMEs are increasingly integrating artificial intelligence (AI) into their operations, with usage rising from 55% to 57%. However, concerns over AI-related risks are growing, with 47% viewing AI as a business threat, compared to 31% last year. Privacy issues and job losses were cited as top concerns by 69% of respondents, while 52% expressed security-related worries. Despite these risks, most SMEs do not foresee AI replacing jobs immediately, with automation expected in customer service, human resources, and sales and marketing roles only after 2031.
