More organizations than ever are investing in cyber insurance, but the number of claims is surprisingly on the decline. According to the latest report from UK backup solutions provider Databarracks, organizations are stepping up their cybersecurity game in response to evolving threats.

The 2024 Data Health Check report reveals that 66% of UK organizations now have cyber insurance, a significant increase from 51% in 2022 and 57% in 2023. Despite this rise in coverage, the number of organizations making cyber insurance claims has plummeted from 58% in 2022 to just 36% in 2024.

Interestingly, the amount of financial compensation claimed by organizations has also decreased, with claims over £1m ($1.3m) dropping from 48% to a mere 16% in 2024.

Broader Adoption of Business Continuity Plans

Cyber incidents remain a significant threat, leading to IT downtime (24%) and data loss (46%) in organizations in 2024. Despite these challenges, organizations are proving to be more resilient than ever.

The Databarracks report highlights that organizations are increasingly prepared to respond to cyber-attacks. A striking 82% of organizations now have a business continuity plan in place, with 57% ensuring that their plans are up to date. This marks a significant improvement from the previous year, where only 73% had such a plan and just 49% had updated it.

Moreover, three-quarters of organizations have implemented solutions to air-gap their backups, enabling 54% of organizations to recover their systems without paying ransoms in response to ransomware attacks.

Stricter Cyber Insurance Policies to Combat Ransomware

The decline in cyber insurance claims can be attributed to organizations’ enhanced preparedness. James Watts, managing director at Databarracks, commended the stricter cyber insurance policies that have encouraged organizations to bolster their cyber defenses.

Watts emphasized that well-drafted cyber insurance policies are not meant to incentivize ransom payments but to elevate cybersecurity standards. He highlighted the importance of businesses recovering from backups instead of giving in to ransom demands, emphasizing the value of resilience.

As the industry continues to evolve, the shift towards stronger cyber defenses and proactive measures is seen as a promising deterrent to the growth of ransomware attacks. Databarracks’ annual Data Health Check survey serves as a valuable insight into the evolving landscape of cybersecurity.

Read more: Understanding Business Resilience: There’s More to it Than Meets the Eye