More than 95% of average data breach losses and 90% of average first-party losses are adequately covered by insurance, according to the latest report published in Australia by Willis, a WTW business (NASDAQ:WTW). The report, Cyber claims in Focus - Getting value from cyber insurance, analyses 5,500 cyber claims occurring from January 2013 to January 2026 across 95 countries, and around US$1 billion in insurer payments.
Data breaches are the most frequently reported cyber insurance loss, with malicious data breaches accounting for the majority of incidents. Ransomware losses register the highest financial severity, predominantly driven by the disrupted productivity and prolonged downtime that follows incidents. Third-party vendors are responsible for an increasing proportion of losses, and systemic risk from single vendor incidents impacting multiple organisations remains a critical concern.
Other key findings include:
• The average ransomware event lasts 25 days, and the average loss is US$5.3 million, with the largest single loss now exceeding US$500 million.
• Events where attackers target organisations’ systems directly account for 58% of ransomware notifications and 95% of total costs, while vendor-led incidents account for 42% of notifications but only 5% of costs.
• Business interruption losses and ransom payments represent the two largest cost elements for ransomware events. Average ransom demands are now US$3.8 million versus an actual payment of US$1.5 million.
• Third parties are responsible for nearly 50% of data breach losses and 29% of first-party losses. Among the third parties responsible for breach events, 50% fall into the IT, tech or telecom categories, 17% involve financial institutions and 11% come from administrative services.
• Pixel-tracking litigation is the hidden cyber insurance risk, with some cases leading to substantial losses across the wider cyber insurance market.
“Our analysis highlights a consistent pattern: while the average claim value is approximately $3.3 million, a relatively small number of large-scale events drive the majority of total losses. Incidents exceeding $10 million represent only around 5% of claims by volume, yet account for close to 90% of total cost, underscoring the materiality of tail risk in cyber portfolios. While certain industries are targeted more frequently, no organisation or industry is immune to cyber incidents,” said Michael Parrant, Director, Cyber & Technology Practice, FINEX Pacific, Willis.
“In Australia, large-scale incidents have reinforced the reality of escalating regulatory scrutiny, increasing class action exposure, and the significant downstream costs associated with remediation, customer notification and business disruption.
“As the threat landscape continues to intensify, the impact is being felt not only in the frequency, severity and velocity of cyber events, but also in the expanding blast radius and persistence of attacks. In response, organisations are increasingly adopting cyber risk quantification to support both control investment and insurance purchasing decisions, ensuring that programs are calibrated not only to expected losses, but to increasingly volatile and interconnected tail-risk scenarios.
“To get the strongest value from cyber insurance, consideration must reflect the claims patterns seen across the market.”
Peter Foster, chairman, global FINEX cyber and cyber risk solutions at Willis, added, "Cyber insurance cover varies widely, which is why organisations must understand what they have in place and ensure it aligns with their risk exposures. When cover doesn’t reflect reality, organisations risk critical gaps where protection is needed most, while paying for cover that offers little real value. To get the strongest value from cyber insurance, consideration must reflect the claims patterns seen across the market. Our analysis of claims and loss data provides hints to understand how cyber losses occur and what that means for organisations, helping them to prioritise the most material scenarios and design coverage around these realities.”
Visit www.wtwco.com/en-nz to read the entire report.
