FBI data shows a 26% rise in losses even as cyber insurance rates keep falling
US internet crime losses reached nearly $21 billion in 2025, a 26% increase from $16.6 billion the year before, and the first time the FBI’s Internet Crime Complaint Center (IC3) received more than one million complaints in a single year, according to the bureau’s 2025 Internet Crime Report. The IC3 figure covers all reported internet crime, including consumer fraud and investment scams, not only the business losses that cyber insurance is designed to address.
The figures were cited in a new commercial cyber insurance brief by the Insurance Information Institute (Triple-I), which examined rising claim severity, AI-driven threats, and the widening protection gap among small and midsize businesses.
Fewer claims, much bigger losses
The claim picture for large businesses has shifted in a way that should prompt a hard look at existing limits. According to Chubb’s 2026 Cyber Claims Report, average claim severity for large businesses doubled to $4.4 million in 2025, even as claim frequency fell 34% for that segment.
Fewer claims, however, is not the same as lower exposure. It reflects better threat detection among well-resourced organizations, while the incidents that do get through are costlier and more complex. The Triple-I brief also cited IBM research showing organizations using security AI and automation experienced average breach costs of $4 million, compared with $5.93 million for those without those capabilities.
Ransomware continues to drive severity. Verizon’s 2026 Data Breach Investigations Report found ransomware was involved in 48% of data breaches examined, though 69% of victims declined to pay, partly because improved data backups have reduced the leverage attackers once had.
The SMB gap is not a price problem
The coverage shortfall runs deepest below the large-account tier. Swiss Re estimates cyber insurance penetration among small and midsize businesses sits at just 10% to 20%, despite four consecutive years of rate declines. Rates fell approximately 5% year-to-date in 2026, following a 13% decline in 2025. Global premiums are projected to reach $16.4 billion in 2026, growing at roughly 5% annually since 2022, but that growth is concentrated in segments that are already insured.
The penetration data suggests affordability is not the primary barrier. Munich Re’s 2026 Cyber Risk and Insurance Survey found nine out of 10 C-level executives worldwide consider their companies inadequately protected, and a separate Munich Re survey found 28% of companies had never been offered cyber insurance at all. The study finds that the gap among smaller businesses is largely driven by limited access to appropriate products and a tendency to underestimate exposure, rather than by the cost of coverage.
AI is reshaping attacks and defenses
AI’s role in the risk landscape cuts both ways. The Triple-I brief cited FBI data showing nearly $893 million in losses linked to AI-enabled incidents in 2025, reflecting the growing use of AI-powered phishing, impersonation, and social engineering in cyberattacks. At the same time, organizations that deploy security AI are absorbing meaningfully lower breach costs, as the IBM data shows.
The Triple-I brief also noted that effective oversight, employee training, and data security governance will become increasingly important as AI adoption accelerates. Munich Re research found that 26% of businesses without coverage said they did not know cyber insurance existed, and 23% cited confusion over what is covered, a finding that reinforces the education gap above price as the main barrier.
Sean Kevelighan, president and CEO of Triple-I, said cyber insurance is an important part of a comprehensive risk management strategy, particularly for businesses with fewer resources to recover from an attack, but added that “prevention, preparedness and insurance coverage must work together.”
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