Cyber Threats Escalate as Reputational Risk and Systemic Events Converge

Cyber incidents are becoming more frequent, more severe, and increasingly uninsurable, according to Aon's 2025 Global Cyber Risk Report. The report, which analyzed more than 1,400 global cyber events, warns that organizations face a complex and shifting landscape—one where a single attack can slash shareholder value by 27 percent and ripple across entire industries.

While reputation risk remains a key concern—especially from malware and ransomware attacks, which Aon found to be the most likely to trigger reputational fallout—the report also points to rising systemic risk and third-party vulnerabilities. In 2024, ransomware claims rose 24 percent, yet average payment amounts dropped by 77 percent, indicating improved cyber resilience among insureds, Aon said.

Aon's data showed modest gains in cyber-control maturity, with a 5 percent year-over-year improvement globally and 9 percent among clients who renewed policies. Middle-market firms (with $100 million to $2 billion in revenue) showed the strongest improvement at 11 percent. However, Aon warned that gaps remain. Fifty-five percent of these firms have not run tabletop cyber exercises, and nearly half have incomplete vulnerability scanning, increasing the risk of business interruption.

In the US alone, Aon tracked 1,228 cyber and errors and omissions incidents in 2024—a 22 percent year-over-year increase. The majority involved ransomware, business interruption, regulatory actions, or class action litigation. Midsized US organizations filed more claims than any other group, according to Aon, and underinsurance remained a critical issue.

The financial cost of major events was substantial. A ransomware breach at a healthcare payments provider in February 2024 impacted data for 190 million individuals and resulted in $3.09 billion in pre-tax losses. In July, a CrowdStrike outage caused 8.5 million systems to crash worldwide, disrupting airlines, hospitals, and financial institutions. One airline reported a $500 million revenue hit. According to Aon, these types of single-point-of-failure events underscore the importance of scenario modeling and supply chain risk assessments.

Insurers, meanwhile, are contending with increased competition and softening pricing. US-based risks saw a 7 percent drop in cyber premiums in the first quarter of 2025. Despite increased claims activity, insurer loss ratios remained stable. Aon said that market conditions remain favorable for buyers, particularly those with mature cyber-security controls.

Still, some risks remain largely uninsurable. Of the 1,414 cyber events Aon analyzed, 56 became reputation risk events—defined as those that drew significant media attention and caused measurable share price declines. These events led to an average 27 percent fall in shareholder value. Malware and ransomware were responsible for 60 percent of these high-profile incidents. Network and system attacks, though less common, caused the greatest shareholder damage at 51 percent on average.

Aon identified five critical drivers of recovery from reputational damage: preparedness, leadership, swift and credible action, transparent communication, and demonstrated change. The report emphasized that companies executing these strategies could avoid long-term value destruction—and in some cases, even see their value rise post-event.

The 2025 Global Cyber Risk Report concludes that cyber threats have evolved into a board-level issue requiring integrated action across risk management, technology, insurance, and corporate governance. With uninsurable exposures on the rise and systemic interdependencies increasing, Aon said organizations must rethink how they model, mitigate, and transfer cyber risk.