While the climate has been top of the news agenda globally this week has also seen the full costs of rising cyber criminality laid bare in the United Kingdom.

The latest figures from the Association of British Insurers (ABI) show its members paid £197 million to help businesses recover from cyber incidents in 2024.

Data from firms participating in the ABI’s cyber data collection revealed a 230% year-on-year increase in the amount paid out to support businesses with cyber-attacks, £138 million more than in 2023.

Malware and ransomware accounted for over half (51%) of all claims. The figures explained from a total of 32% of all claims in 2023, highlighting how increasingly sophisticated digital threats are causing more extensive damage, leading to higher payouts.  It also underscores the critical support insurance provides when such attacks halt business operations.

The ABI has issued a call for risk managers to seriously consider their levels of cyber coverage describing the insurance as “indispensable in today’s digital economy”.

With cyber threats escalating, demand for protection surged in 2024. 17% more policies were taken out than the previous year. The association added the stampede for cover presented clear evidence that UK businesses are prioritising protection against evolving digital risks.

Commenting on the ABI’s announcement Warren O’Driscoll, head of security practice at NTT DATA UK&I, said: “The fact that UK cyber insurance claims tripled in 2024 is in many ways down to a perfect storm of overlapping factors.

“As highlighted in the recent documented briefing by MI5, there are rising geopolitical threats. It’s increasingly easy for threat actors to exploit vulnerabilities: we’ve witnessed, for example, the industrialisation of ransomware services and the leveraging of AI within phishing & social engineering.

“On top of that, we’ve seen numerous vulnerabilities generated by complex supply chains and the procurement-driven need to push for low-cost solutions and services: with heavy use of offshore functions, data access and visibility often cannot be easily verified.”

He added for insurers and the insured, ramping up insurance premiums cannot be the answer. The solutions instead lie in improved UK regulations, and in better support for insured organisations to strengthen their cyber security maturity.

“The insurance market has to reckon with the changing risks profiles in a more dynamic way: to develop a better understanding of their clients’ operational and resilience risks, as well as the quality and location of their supply chain services and solutions,” O’Driscoll continued. “If we do not act, today’s £197 million in payouts will prove to be only a down payment on a much more volatile and expensive period of cyber risks.”

In a week when insurers have been told climate risks are threatening to become uninsurable cyber-crime is showing every sign of becoming a huge headache for businesses and with it their underwriters.

Jon Guy, Editor,

Emerging Risks