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Digital EditionCyber Insurance Claims Severity Drops 50% as Threats Shifting to Smaller Targets
Cyber insurance claims severity plummeted by more than 50% in the first half of 2025 even as the overall threat landscape expanded, with attackers increasingly targeting smaller, less-protected firms and exploiting supply chain vulnerabilities, according to Allianz Commercial’s Cyber Security Resilience 2025 report.
“Several ransomware events have hit the headlines this year, but overall, we see that insured losses from these attacks have decreased in 2025 to date,” said Michael Daum, global head of cyber claims at Allianz Commercial. “Insureds’ increased detection and response capabilities are helping to stop some attacks at an early stage. Every step an attacker progresses, and every minute that they are in the system, the impact goes up exponentially.”
Evolving Attack Patterns Reveal Strategic Shifts
The cyber threat landscape is undergoing a fundamental transformation as criminals adapt their tactics to bypass strengthened corporate defenses, according to the report. While ransomware continues to dominate the claims landscape—representing approximately 60% of large claim values exceeding €1 million ($1.2 million)—attackers are abandoning frontal assaults on well-defended corporations in favor of more vulnerable targets.
Data theft has emerged as a primary objective, with 40% of large cyber claims in early 2025 involving data exfiltration, a sharp increase from 25% throughout 2024, the report said. This shift reflects a calculated move by cybercriminals who find stealing data faster and more profitable than encrypting systems. The average global data breach cost reached nearly $5 million in 2024, creating powerful leverage for extortion demands.
Supply chain vulnerabilities have become an increasingly attractive attack vector, Allianz reported. Contingent business interruption events stemming from supplier compromises jumped to 15% of large claim values in the first half of 2025, compared with just 6% the previous year. Cloud intrusions alone surged 136% during this period, highlighting the risks inherent in interconnected digital ecosystems, the report noted.
Small Businesses Face Disproportionate Risk
The redistribution of cyber risk toward smaller organizations presents significant challenges for the insurance industry, according to Allianz. Ransomware attacks struck 88% of data breaches at small and medium enterprises compared to 39% at large corporations, revealing a stark vulnerability gap. Manufacturing companies bore the heaviest losses, accounting for 33% of large claims by value, followed by professional services firms at 18% and retailers at 9%.
Human vulnerabilities remain the weakest link in cyber defenses, the report said. Approximately 60% of breaches involved human error or manipulation, with third-party involvement doubling to 30%. Sophisticated social engineering tactics, including AI-enhanced phishing campaigns and voice impersonation, have made credential theft increasingly common. Groups like Scattered Spider have demonstrated the effectiveness of these approaches through successful attacks on casinos, airlines, and insurers, the report noted.
Privacy-related claims arising from breaches are compounding the challenge, with litigation reaching unprecedented levels, Allianz noted. Some 1,500 data privacy actions were filed in the United States alone during 2024, while technology and media professional indemnity claims accounted for 25% of large cyber claims by value in early 2025.
Building Resilience Through Prevention and Technology
In Germany, insurance industry data shows that the loss impact of cyber insureds increased by around 70% over four years, compared with a 250% increase in the economic impact of cybercrime, according to Allianz. This resilience gap of more than 3:1 reflects cyber insurance policyholders’ heightened awareness of risk and their actions to mitigate it, many of which are a condition of obtaining insurance, the report noted.
Allianz’s analysis found that insured companies’ decisions influenced loss sizes in more than 80% of large claims, with basic controls like patching, network segmentation, and multi-factor authentication preventing many incidents. Detection and response capabilities can reduce claim costs by a factor of 1,000, driving forecasts for the global managed detection and response market to quadruple over the next decade.
The global cyber insurance market is projected to nearly double to $30 billion by decade’s end, driven by increasing digitalization and growing awareness of cyber risks, the report said.
“We need to underline that cyber insurance plays an important role in helping build resilience at a time of rapid technological and regulatory change,” said Jarrod Schlesinger, global head of financial lines and cyber at Allianz Commercial.
Obtain the full report here. &
