UK Cyber Insurance Claims Drop as Businesses Opt for DIY Ransomware Recovery

In the United Kingdom, cyber insurance claims have seen a significant decline between 2022 and 2024, even as more organizations take out policies to protect against cyber threats. According to Databarracks’ Data Health Check, an annual survey of 500 UK IT decision-makers, 66% of organizations now have cyber insurance, a notable increase from 51% two years ago. Despite the rise in coverage, the percentage of businesses making claims has dropped from 58% in 2022 to just 36% in 2024.

This sharp decrease in claims is primarily attributed to a growing trend of organizations recovering from ransomware attacks using their own resources, such as secure backups, rather than paying ransoms to cybercriminals. The study highlights that in 2024, twice as many organizations were able to recover from ransomware attacks without resorting to ransom payments, compared to previous years when paying the ransom was the more common response.

James Watts, Managing Director of Databarracks, explained that this shift is partly driven by the rising costs of cyber insurance and the increasingly stringent requirements insurers have imposed for coverage. As insurance premiums have soared and policies have become more difficult to obtain, businesses have been compelled to enhance their cyber resilience. This includes implementing robust data protection measures, such as air-gapped and encrypted backups, and developing comprehensive business continuity plans that are regularly tested for effectiveness.

Watts pointed out that these improvements in preparedness are crucial for breaking the cycle of ransom payments that have long plagued the cyber insurance market. By raising the bar for what is required to obtain insurance, the industry is encouraging organizations to prioritize recovery capabilities over quick payouts to cybercriminals. The survey also noted a significant reduction in the value of claims, with the proportion of claims exceeding £1 million dropping from 48% in 2022 to just 16% in 2024.

This trend represents a positive shift in the cybersecurity landscape, as UK businesses become more resilient against ransomware threats. By focusing on recovery and reducing their reliance on insurance payouts, these organizations are not only protecting themselves more effectively but are also diminishing their appeal as targets for cyberattacks. Watts emphasized that while paying ransoms may seem like an easier solution, it rarely guarantees the return of data and can lead to businesses being seen as soft targets by cybercriminals. Ultimately, this shift towards self-reliance and enhanced recovery measures could be a critical factor in disrupting the growth of ransomware attacks across the UK.