The company states that backups are encrypted, but it was discovered that they aren’t actually end-to-end encrypted. This means that Apple actually holds the keys to the encryption and if they wanted to, could decrypt the contents of your backup. The good news though is that soon your WhatsApp chats will be protected from this.
As discovered by WABetaInfo, the latest beta for WhatsApp for iOS introduces end-to-end encryption for backups stored in iCloud. This puts the decryption keys in the hands of the account holder, in this case you, so that in the event someone were to gain access to your iCloud backup and could decrypt it, your WhatsApp chats are safe.
WhatsApp initially announced plans for this feature back in September, and it looks like they’re now starting to test it. There is no word on when the feature will be coming out of beta, but it could be something to look forward to in the future.