Recent trends indicate a significant shift in the approach of Hong Kong's small and medium enterprises (SMEs) towards risk management and technology adoption. According to a survey by QBE Insurance, more SMEs are moving back to traditional offline insurance channels while scaling back on cybersecurity measures. The study also highlights growing financial challenges and evolving perceptions about artificial intelligence (AI).

Offline Insurance Channels Gain Preference Over Digital Platforms

There has been a notable increase in SMEs preferring offline methods for obtaining insurance coverage. A substantial proportion now favors face-to-face interactions with brokers and banks over online platforms. This shift reflects a growing preference for personal engagement and trust in conventional channels.

Specifically, 68% of SMEs now prefer offline methods, up from 57% last year, while the inclination towards online platforms has dropped from 43% to 32%. The reliance on brokers has risen from 22% to 30%, and banks have seen an uptick from 14% to 18%. Conversely, online aggregators and direct platforms have experienced declines, dropping from 22% to 16% and 21% to 16%, respectively. This trend underscores a broader move towards established, reliable methods of securing business protection.

Financial Strain and Evolving Cybersecurity Strategies

SMEs in Hong Kong are encountering increasing financial difficulties, leading to changes in their investment in cybersecurity measures. While some aspects of cyber protection have been scaled back, there is a growing interest in hiring dedicated cybersecurity staff and purchasing specialized insurance policies.

Nearly 60% of SMEs reported experiencing higher costs and reduced profitability this year, compared to 40% last year. Talent and labor shortages, coupled with cash flow issues and limited access to funding, have affected about half of the respondents. Despite these challenges, 49% of SMEs are now hiring dedicated cybersecurity personnel, up from 43%, and 43% are purchasing cyber insurance, compared to 39% previously. However, investments in security solutions, staff training, and resilience consulting have decreased slightly. Additionally, awareness of cyber risks has increased, but incidents have also risen from 30% to 33%. Many SMEs are considering cyber insurance, though concerns about cost and perceived risk remain barriers for some.