Think You’re Covered? Why Insurers Are Rejecting More Cyber Claims

The UK is experiencing a dramatic shift in the cyber-risk landscape, reshaping how organisations must plan for digital disruption. According to the Association of British Insurers (ABI), cyber-insurance claims surged by more than 230% in 2024, with payouts totalling £197 million across ransomware, phishing and business interruption incidents.

This surge underlines a hard truth: cybercrime has become a mainstream operational and financial threat. For most organisations, the question is no longer “Will we be attacked?” but “How severe will the impact be, and are we prepared, both operationally and through insurance?”

Why Attacks are Becoming Harder to Contain

Attackers are evolving faster than many businesses can adapt. Instead of relying on single-hit ransomware, they now:

• Steal sensitive information for extortion pressure
• Target supply chains to maximise disruption
• Use AI to craft highly convincing social engineering attacks
• Operate as international, service-based criminal organisations

The UK Government reports that 43% of UK businesses suffered a cyber breach in the last 12 months. SMEs, which make up 99% of UK businesses, are disproportionately at risk, as attackers see them as easier targets with critical dependencies.

Boards are Becoming Accountable for Cybersecurity

Cyber incidents are now treated as business continuity events, not pure IT problems. This shift has regulatory backing:

• The UK’s Network and Information Systems (NIS) policies are aligning more closely with the EU’s NIS2 directive, particularly around supply-chain governance
• The Information Commissioner’s Office expects demonstrable resilience and breach-readiness
• Insurers increasingly require evidence of security controls before underwriting, and executives who cannot demonstrate oversight risk regulatory, shareholder and reputational consequences

How Cyber Insurance Is Changing

Insurers are becoming more selective, requiring proof of robust controls such as:

• Multi-factor authentication (MFA) across critical systems
• Regular, verifiable software patching
• Robust endpoint detection and response (EDR)
• Encrypted, offline backups and tested recovery scenarios
• Employee phishing and awareness training

Claims can be denied if organisations misrepresent their cyber posture or fail to implement agreed-upon controls. Cyber insurance is evolving from a safety net after an incident to a mechanism that rewards proactive cyber maturity.

At the same time, the right policy can serve as an important part of a wider resilience strategy. Forward-thinking organisations now use cyber insurance to:

• Fund rapid incident response and forensics
• Cover lost revenue from downtime and operational disruption
• Manage legal liabilities and regulatory penalties
• Provide crisis communications support to protect brand trust

This matters because UK businesses face an average of eight days of operational downtime after ransomware. The right cover reduces survival risk and speeds up recovery.

What Leadership Teams Should Do Now

To secure fair premiums that reflect actual risk, and ensure policies pay out when needed, boards should prioritise:

• Clear senior ownership of cyber strategy
• Regular cyber-risk reporting and threat-intelligence briefings
• Independent audits of resilience and backup integrity
• Contractual security requirements for third-party suppliers
• Regular scenario-based incident-response exercises involving leadership teams

The winners will be the organisations that treat cyber resilience as a continuous lifecycle, not a once-a-year insurance renewal.

How AJC Can Help

At A Jolly Consulting, we help organisations strengthen operational resilience and business continuity so that when disruption happens, they can respond quickly and recover confidently.

Our services include:

• Business Continuity Scenario Testing to identify weaknesses before they are exposed
• Cyber Health Checks to benchmark maturity against insurer expectations
• Incident-Response Planning that connects technical, operational and communications readiness
• Third-Party Risk Assessments to ensure supplier dependencies are secure

By aligning security, governance and continuity, AJC helps organisations reduce the impact of incidents, satisfy insurer and regulator expectations, and safeguard customer trust.

Conclusion

Cyber insurance in the UK is entering a new era. Risks are rising faster than coverage limits or premiums, leaving many organisations exposed if they rely solely on insurance as a safety net.

The most resilient organisations will be those that:

• Strengthen their cyber posture
• Use insurance to enhance, not replace, security
• Treat cyber risk as a C-suite, not an IT, responsibility

Cyber threats are evolving relentlessly. The organisations that treat resilience and business continuity as ongoing priorities will be best equipped to adapt, recover and thrive in the face of disruption.

Contact us on 020 7101 4861 or email us at info@ajollyconsulting.co.uk if you think we can help.

Sources:

https://www.gov.uk/government/statistics/cyber-security-breaches-survey-2024

https://cybernews.com/security/uk-cyber-insurance-claims-skyrocketing/

https://www.fsb.org.uk/media-centre/uk-small-business-statistics

https://www.ncsc.gov.uk/collection/small-business-guide

https://www.ncsc.gov.uk/collection/board-toolkit

https://news.sophos.com/en-us/2024/04/30/the-state-of-ransomware-2024/

https://www.hiscoxgroup.com/sites/group/files/documents/2024-10/HSX245%20%E2%80%93%20%202024%20CRR.pdf

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