By Erin Ayers, Front Page News
Cyber risk overtook economic uncertainty as the top concern for businesses, according to Travelers’ latest Risk Index, while cyber insurance purchasing reached its highest level yet in the annual survey.
Not only that, 81% of respondents view appropriate, effective cyber coverage as “critical” to their company’s survival. Cyber insurance, long considered a bit of a tough sell for brokers, is having its time in the sun and it’s not a moment too soon.
Artificial intelligence-related cyber events now rank as the second-biggest worry for businesses, with 55% of respondents expressing concern. However, while 89% say they already use AI tools in their day-to-day operations, only 59% have formal policies governing how employees use them.
“This 30-point gap really stands out, and it cuts both ways,” said John Menefee, vice president and enterprise cyber lead at Travelers, in a statement. “Companies are focused on what cybercriminals are doing with AI, and that concern is justified. However, companies should be equally focused on the risks created by their own AI use when the right practices and policies aren’t in place.”
Cybercriminals have no such stumbling blocks, leveraging AI to deploy more effective cyberattacks, per IBM’s recent Cost of a Data Breach Report. In the U.S., the average cost of a breach soared 13% to $11.5 million, while AI-enabled cyberattacks jumped 56%.
One in four malicious breaches analyzed for the report were estimated to be AI-enabled, a sign of “the cracks in the walls spreading,” IBM warned. Typically consisting of deepfakes and AI-enabled malware, AI-enabled cyber events cost an extra $1 million per breach on average, the firm found.
Cyber insights always rate well with Front Page News subscribers, and our story on Travelers’ Risk Index ranked as one of our Top 10 most-forwarded articles. It was joined by coverage of Aon’s annual U.S. Cyber Market Update, a report that outlined rising cyber claims and a continued uptick in third-party cyber events.
Aon’s research, which draws from data sourced by the National Association of Insurance Commissioners (NAIC), revealed a 53% loss ratio for U.S. cyber insurers in 2025. Premium volume for the market increased nearly 7% to $7.6 billion.
Taken together, the perspectives from Travelers, IBM, and Aon all make for a compelling argument for cyber risk management and insurance.
Aon’s report highlights the fact that much of the 7% increase in U.S. cyber premiums came from policy counts ticking up rather than being rate-driven growth. This indicates the message on cyber being received by many organizations.
That said, the Travelers survey revealed that 50% of small businesses still do not carry cyber insurance, compared to the 24% of mid-sized firms and 18% of large businesses that don’t buy.
That likely leaves those organizations less protected and less prepared for cyber threats. The survey showed that 38% of businesses experienced system glitches or user error; 33% suffered a security breach; 31% saw employees putting data or systems at risk; 25% detected unauthorized access to operational control systems; and 24% fell victim to a vendor-related cyber event.
The risks are real, the claims are rising, and the coverage is there. For brokers, the sales pitch has long been “this could happen to you.” While cyber insurance uptake has increased, there’s still room for improvement, education, and preparation, especially as risks evolve.
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Managing Editor Erin Ayers can be reached at [email protected].
