Cyber risk report shows drop in major losses but highlights new threats

Cyber risk report shows drop in major losses but highlights new threats
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Sirma Boshnakova Insurance Western & Southern Europe, Allianz Direct, Allianz Partners | Allianz SE

The cyber risk and insurance landscape in 2025 is marked by ongoing challenges as companies face increasingly complex threats. According to Allianz Commercial’s latest cyber risk report, large insured companies have improved their resilience through stronger security measures and enhanced preparedness, which has helped reduce the impact of major cyber losses this year.

Analysis of Allianz Commercial’s claims data shows that the frequency of notifications in the first half of 2025 was similar to the previous year, following a significant rise in 2023 compared to 2022. While attack sophistication and volume continue to grow, the severity of claims has dropped by over 50%, and large loss claims exceeding €1 million are down about 30%. This decline is attributed to investments in cybersecurity, detection, and response capabilities among larger organizations.

Despite these improvements, the threat environment remains dynamic. Ransomware continues to be a leading cause of incidents. The report notes an increase in losses from contingent business interruption, technology failures, and privacy litigation—wrongful data collection or processing and system outages made up a record 28% of large claim values in 2024.

There has been a shift from traditional ransomware attacks toward double extortion tactics involving data exfiltration. In the first half of 2025, data theft was involved in 40% of large cyber claims (€1 million or more), up from 25% in 2024. Losses linked to data exfiltration were more than twice as high as those without it. The average global cost for a data breach reached nearly US$5 million in 2024, influenced by stricter privacy regulations.

Recent attacks commonly use advanced social engineering techniques and compromised credentials—such as impersonating employees locked out of IT systems—to access networks. Attackers also exploit digital supply chains and third-party vendors for entry points; about 60% of breaches last year involved human error or manipulation. There is also an increase in “brokers” selling access credentials obtained via phishing or on dark web markets.

Retail was the most targeted industry during early 2025 but ranked third overall behind manufacturing and professional services for total impact since 2020. Manufacturing accounted for one-third (33%) of large claim values since then; professional services/consulting firms made up 18%, with retail at 9%.

Claims tied to IT supply chain dependencies are increasing: contingent business interruption events represented 15% of large claim values so far this year versus just 6% last year. These losses stem from both attacks and technical faults affecting critical services like software or cloud platforms. Managing vendor risks requires robust contracts as well as monitoring supplier access controls and audits.

Data breach claims relating to wrongful collection or processing have tripled over three years, making up a record-high share (18%) of large claim values analyzed in 2024.

Technology/media professional indemnity claims rose during early 2025, accounting for a quarter of all large cyber claim values—up from one-fifth last year—with many related to legal actions against tech companies over service performance issues or alleged privacy violations.

Effective cyber hygiene, early detection, and incident response have proven valuable for reducing claim costs: decisions by insureds affected loss size in more than four out of five large cases reviewed by Allianz Commercial. Detection and response capabilities can lower costs dramatically—by up to a factor of one thousand.

A gap is widening between insured and uninsured organizations regarding resilience against cyber risks. For example, German insurance industry figures show that while loss impacts among insureds grew by about 70% over four years, economic impacts from cybercrime increased by around 250% overall during the same period.

This difference reflects not only policyholder awareness but also conditions set by insurers—including requirements for risk mitigation—as well as support through prevention services and incident response assistance. Business interruption accounts for more than half the value of cyber claims; early detection combined with continuity planning can help minimize these losses.

As companies make progress mitigating risks through better security practices, evolving threats require ongoing vigilance and investment. Cyber insurance remains essential for financial protection while providing expertise that supports broader resilience efforts. The global market for such coverage is expected to exceed US$30 billion by decade’s end due to growing digitalization and awareness—even though penetration rates remain relatively low outside some sectors; demand is rising especially among mid-sized firms and previously underinsured regions.

Allianz Commercial will host its annual webinar on September 30 from 4-5 pm CEST where experts will discuss current trends in cyber claims, key loss drivers, and strategies for preparation and response.

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