Ransom Demands Surge 47%, But Firms Aren't Paying
Initial ransom demands in cyberattacks jumped 47% last year, according to a new report from Coalition. Despite the higher demands, most businesses are refusing to pay, though business email compromise and funds transfer fraud remain the most common cyber insurance claims.
The growing refusal to pay ransoms is linked to stronger corporate defenses, including better data backups and more robust incident response plans. This preparation allows companies to restore operations without engaging with attackers, signaling a potential shift in the power dynamic of cyber extortion. Despite the high rate of non-payment, ransomware remains the most expensive category of cyber claim, with an average loss of $269,000 per incident in 2025. While overall cyber claim severity fell 19% to an average of $116,000, the high cost of a successful ransomware attack underscores its significant financial risk. However, ransomware accounts for a minority of total cyber events. Business Email Compromise (BEC) and Funds Transfer Fraud (FTF) are far more common, together representing 58% of all cyber incidents reported to Coalition last year. The frequency of BEC claims specifically jumped by 15% in 2025. Better mitigation strategies have contained the financial fallout, causing the average loss per BEC incident to drop by 28% to just $27,000. In response to non-payment, attackers are increasingly turning to "double extortion." This tactic involves stealing sensitive corporate data before encrypting it and then threatening to leak the information publicly, adding another layer of pressure on businesses to pay. Larger businesses, those with over $100 million in revenue, face a cyber claim frequency five times higher than smaller companies. However, the average loss for this group has been trending downwards since 2024, falling 7% to $268,000 last year, suggesting more mature cyber defenses are proving effective. Cyber insurers are playing a more active role in mitigating losses. In 2025, Coalition successfully recovered $21.8 million in stolen funds on behalf of its policyholders, with an average recovery of $202,000. For 64% of its clients, claims were closed with no out-of-pocket loss for the policyholder.
