Cyber Insurance Claims Costlier Despite Drop in Frequency

Cyber insurance is getting more expensive for the companies that need it most, even as the number of claims filed drops. A new report from insurer Chubb shows that while large and middle-market firms filed fewer claims in 2025, the average cost of those claims surged — in some cases nearly doubling year over year.

Costs Up, Claims Down

For US middle-market companies, the average claim cost rose 22% in 2025 compared with 2024. Large US companies saw a 100% increase, according to Chubb's 2026 Cyber Claims Report.

Similar trends played out in the UK and Europe. Middle-market firms there saw claim severity climb 34%, while large firms saw a 98% jump.

Litigation and Interruptions Drive Severity

Chubb attributes the growing severity of claims in the US largely to increasing costs from data breach and privacy-related litigation, alongside rising business interruption expenses.

The report points to a widening array of US and EU privacy laws that impose complex, layered obligations on companies storing or transferring personal data. These include opt-out rights for profiling or automated decision-making and new disclosure requirements for AI-driven processing.

Data Leaks Raise Litigation Risk

The insurer also notes that ransomware actors increasingly leak data alongside encrypting it, which heightens the risk of litigation under data protection laws for victim firms.

Chubb highlights a particularly costly aspect of US litigation: companies often must pay substantial upfront administrative fees for each individual filing, regardless of the claim's merit.

“In a suit involving 10,000 claimants, for example, these non-refundable fees can exceed $10m before the merits of the case are even heard,”

— Chubb, in its 2026 Cyber Claims Report

Regional Differences in Costs

The average cost was far higher in the US than in the UK and Europe in 2025. Chubb explains this by the absence of material third-party litigation expenses in the latter region, from both data breach and non-data breach privacy claims.

SMEs See More Claims, Mixed Costs

For small and medium-sized enterprises (SMEs), the picture differs. The frequency of claims rose in both regions over the same period. Among US SMEs, the average claim cost fell from $215,297 in 2024 to $141,931 in 2025. In the UK and Europe, SME average claim costs rose from $51,095 to $82,621 over the same period.

Key Figures at a Glance

• US middle-market claim costs: +22% in 2025 vs. 2024
• US large company claim costs: +100% in 2025 vs. 2024
• UK/Europe middle-market claim severity: +34%
• UK/Europe large firm claim severity: +98%
• US SME average claim: $215,297 (2024) → $141,931 (2025)
• UK/Europe SME average claim: $51,095 (2024) → $82,621 (2025)

What This Means for Businesses

The report, published on August 25, suggests that even as the number of claims declines, the financial stakes of a single cyber incident are growing. For businesses, this could translate into higher insurance premiums or stricter underwriting criteria as insurers respond to rising severity. For those holding sensitive personal data, the expanding web of privacy regulations and the persistent threat of ransomware data leaks may make comprehensive coverage increasingly critical.