May 12, 2025 | JacobiJournal.com – Business Email Compromise: Cyber insurer Coalition has released its 2025 Cyber Claims Report, revealing a sharp rise in costs related to business email compromise (BEC). The insurer found that BEC accounted for nearly 60% of all cyber insurance claims it handled in 2024.
Funds Transfer Fraud Drives Costly Losses
Among BEC-related claims, nearly 30% involved funds transfer fraud (FTF)—a costly form of cybercrime. On average, each FTF incident led to initial losses of $185,000. Fortunately, Coalition and its partners were able to recover $31 million, benefiting about one in four policyholders. The report emphasized that faster reporting leads to higher recovery rates.
Claim Severity Increases, Especially in the U.S.
The average cost of a BEC claim jumped 23% in 2024 to $35,000, with U.S.-based claims coming in higher at $36,000. In comparison, the average BEC claim cost was $22,000 in Canada and the UK. Coalition attributed the rising severity to growing expenses associated with legal services, incident response teams, data mining, and notification requirements.
Ransomware Threats Decline—But Still Costly
Despite the rise in BEC claims, ransomware incidents slightly declined, with a 3% drop in frequency and a 7% decrease in severity. Coalition also reported a 22% year-over-year reduction in ransom demands and successfully negotiated a 60% cut in ransom payments on average.
Even so, 44% of policyholders impacted by ransomware chose to pay. The report stressed that ransom payments are not the only cost drivers—business interruption, asset recovery, and forensic investigations also contribute heavily to claim totals.
The data reinforces the growing risk of email-based attacks, especially when combined with fraudulent fund transfers. Insurers and businesses alike must remain vigilant, invest in preventive tools, and ensure rapid incident reporting to minimize losses.
For more cybersecurity guidance, visit the Cybersecurity & Infrastructure Security Agency (CISA).
FAQs: Business Email Compromise Risks in 2025
What is business email compromise and why is it rising?
Business email compromise is a form of cybercrime where attackers gain access to a company’s email accounts to impersonate executives or vendors. According to Coalition’s 2025 Cyber Claims Report, BEC accounted for 60% of all claims last year, largely due to the rise in funds transfer fraud.
How much do business email compromise claims cost?
The average business email compromise claim rose 23% in 2024, reaching $35,000. U.S.-based claims were higher at $36,000, reflecting elevated legal, notification, and incident response expenses.
How can businesses prevent business email compromise losses?
To reduce the risk of business email compromise, companies should implement multi-factor authentication, train staff on phishing awareness, and report incidents quickly. Coalition’s data shows that faster reporting improves the chance of financial recovery.
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