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British businesses could be facing an unwelcome hike in cyber insurance costs after new figures revealed that claims had risen by a third in 2024.
Insurers paid out almost £200m in cyber claims last year, more than three times the £60m paid out in 2023 according to figures from the Association of British Insurers, as reported in the Financial Times.
Malware and ransomware were the biggest reasons for claims, accounting for just over half of all claims. In 2023, they accounted for less than a third of claims.
The figures come on the back of a number of high-profile attacks on British retailers in 2025. Marks & Spencer revealed in May that the costs of a ransomware attack on the company earlier this year would exceed £300 million. The attack took the company’s online shopping facility down for several weeks and affected deliveries to physical stores, and at one point had wiped £750,000 off the company’s value.
The Co-op and Harrods were subject to similar attacks over the summer, prompting the National Cyber Security Centre to issue fresh guidance to retailers on how to avoid falling victim to such attacks.
Even before the release of the latest figures, brokers were warning that retailers faced a hefty increase in cyber insurance premiums. Dan Leahy, Head of Cyber at broker BMS, warned that retailer premiums could increase by as much as 10% following the high-profile incidents over the summer, according to a report in the Financial Times from May.
That followed a sharp decline in premiums in 2023 and 2024, as more businesses began to explore cyber insurance and greater price competition broke out between insurers.
There are also reports that insurers are becoming much more vigilant about the companies they insure, checking that firms have adequate cybersecurity protections in place before even offering to insure them.
Policy exclusions are also becoming more common, with many insurers not covering losses incurred by state-sponsored attacks or where money transfers have taken place – the latter likely a reaction to the growing number of AI deepfakes, where attackers use AI to impersonate a senior figure from within the company, convincing staff to transfer money out of the business.
There have been calls for the UK government to underwrite state-sponsored attacks, although given the government has already signalled it’s likely to increase taxes to cover public spending in this month’s budget, any serious increase in public spending is unlikely to be welcomed.
