News that insurers in the UK have paid out record amounts in cyber claims has prompted a call for British business to take a more proactive approach to the Issue.

New data from the Association of British Insurers (ABI) showed insurers paid out at least £197 million in cyber claims in 2024. The figure signalled that UK cyber insurance claims tripled in 2024  with the £197 million costs having risen from £60 million in the previous year.

It has seen the ABI has call for cyber insurance to become a part of every organisation’s modern risk management strategy.

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 alone accounted for over half (51%) of all claims. This is up 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.

Jonathan Fong, head of general insurance policy at the ABI, said: “Cyber insurance is more than just a financial safety net. The right policy not only supports businesses in the aftermath of an incident but can also help prevent attacks through access to expert advice, threat monitoring, and incident response planning. With cyber threats continuing to grow in scale and sophistication, it needs to be a critical component of every organisation’s modern risk management strategy.”

The ABI added cyber insurance is proving to be indispensable in today’s digital economy, protecting businesses from costly breaches, ransomware, and email compromise while actively helping them prevent attacks and boost resilience. With cyber threats escalating, demand for protection surged in 2024. 17% more policies were taken out than the previous year, presenting clear evidence that UK businesses are prioritising protection against evolving digital risks.

Experts were quick to react.

Anton Yunussov, director, head of cyber security, Forvis Mazars, said businesses could no longer afford to ignore the threat cyber-crime now poses.

“The sharp rise in cyber insurance claims highlights how pervasive and sophisticated cyberattacks have become – and this trend is only set to accelerate,” he explained. “The data reflects what we are seeing on the ground: ransomware, phishing, and supply chain attacks are becoming more targeted, often fuelled by AI-generated campaigns that are far harder to detect. Cybersecurity can no longer be viewed as a technology or compliance issue – it’s a strategic business risk that affects every part of an organisation.

“The fact that insurers are paying out record sums underlines how costly these incidents have become – not only in financial terms, but in reputational damage and operational disruption. British companies must take a proactive approach: regularly assess risks, strengthen third-party oversight, and embed a ‘security-first’ culture through training and accountability. Cyberattacks are now an ongoing and inevitable threat to UK businesses. Those that treat cybersecurity as a core strategic priority by investing in prevention, response, and recover,  will be far better positioned to withstand the next wave of attacks.”

Simon Jelley, vice president and general manager, Data Protection, Arctera added that businesses could not simply rely on cyber insurance as a cushion should an event occur.

“As organisations broaden their risk management strategies, demand for cyber insurance as a safety net to recuperate financial losses is increasing – with UK claims tripling in 2024 to £197 million,” he continued. “But it’s unwise to assume that, because you have cyber insurance, you’re prepared for a cyber-attack. Just as a failure to properly maintain your car can invalidate a motor insurance claim, cyber vulnerabilities could void or limit a payout. No one should be remotely confident in an insurance payout until they take the fundamental steps to protect against a breach.

“This doesn’t just mean being able to show data can be backed up – it’s about showing data is recoverable. Efficient and effective recovery – rehearsed regularly – is critical to keeping up with the ever-evolving threat landscape.”

Malware and ransomware alone accounted for over half (51%) of all claims. This is up 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.