Estimated reading time: 5 minutes
The latest UK Government research on national cyber risk opens with a stark warning that sets the tone for the entire report. Officials outline the scale of the threat and link it directly to rising pressure on businesses, regulators, and insurers across the country. “Cyber attacks represent one of the most pressing threats to the UK’s national security and economic stability in the modern era,” the report states, framing the findings that follow as evidence of a structural risk now embedded in the UK’s economy, public services, and digital infrastructure.
UK Faces Frequent, Disruptive Cyber Incidents
Ministers see cyber risk as a core national security issue. The UK is now the most targeted country in Europe for cyber attacks.
The National Cyber Security Centre handled 204 significant incidents in the year to September 2025. These incidents affected essential services, public safety, and economic stability. On average, experts dealt with one major cyberattack every 2 days.
Last year, 43% of UK businesses reported a breach or attack. That figure equates to more than 600,000 organisations. High-profile cases hit Marks and Spencer, the Co-op, and NHS suppliers, causing cancelled appointments, delayed procedures, and significant disruption.
The Rising Price Tag of a Cyberattack
KPMG’s modelling puts the average cost of a significant cyber attack at almost £195,000 per UK business. That figure covers incidents costing £500 or more and averages across all sectors and sizes.
On a national scale, the annual cost is estimated at £14.7 billion. That equals around 0.5% of UK GDP. Some of the highest average losses sit in information, management, entertainment, manufacturing, and financial services. These sectors are strong export earners but also attractive targets.
For cyber insurers, these numbers confirm a growing loss trend. More value sits online. Attackers adapt quickly. Policies must account for both direct costs and wider disruption.
Intellectual Property Theft Poses Existential Risks
Alma Economics focuses on intellectual property and knowledge-asset theft. The report estimates losses between £1 billion and £8.5 billion in 2024. That range equates to 0.04% to 0.30% of annual GDP.
The study warns that a cyber attack targeting IP can “pose an existential threat to SMEs” when rivals weaponise stolen designs or data. Larger competitors can undercut prices or overwhelm smaller firms with marketing power.
For underwriters, this risk blends cyber, business interruption, and long-tail brand damage. Cover design and pricing become harder when the main loss is future competitiveness.
Fraud Surge Linked to Data Breaches
Frontier Economics models the link between organisational data breaches and personal fraud. The report estimates that 437,000 people were victims of fraud due to data breaches in 2023. That represents around 11% of all fraud victims that year.
Fraud linked to these breaches likely accounts for 8% of the UK’s annual fraud costs. The estimated figure sits at around £755 million a year.
The authors stress the limits of current data. They treat the results as indicative. However, the direction is clear. A cyberattack on a company often causes secondary harm to consumers, banks, and payment providers.
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How a Systemic Rail Cyberattack Could Hit GDP
Another KPMG scenario examines a systemic cyber attack on the rail network. The incident is hypothetical, but the numbers are sobering.
A week of disruption could cost about £1.8 billion. Network Rail could face around £123 million in direct costs. Passenger delays could cost £281.3 million. The hit to gross value added could reach £1.397 billion.
That GVA impact equals 2.8% of weekly GDP and around 0.05% of annual GDP. For insurers and regulators, the scenario highlights systemic accumulation risk. A single cyberattack could simultaneously affect transport, logistics, retail, and labour markets.
Consumers Feel the Impact Across Everyday Services
KPMG also models consumer impacts across sectors. The scenarios cover finance, healthcare, creative industries, real estate, and manufacturing.
A three-day loss of online banking access could cost between £5.5 million and £231 million. A major hospital cyberattack could cost £11.14 million and occur three times a year.
Smaller but frequent events also add up. Cyber attacks on GP practices could occur 37 times a year. Libraries, museums, streaming platforms, and ticketing systems all face disruption scenarios with multi-million-pound impacts.
For cyber insurers, this reinforces a basic truth. A cyberattack rarely stays within the firewall. It spills into customer access, trust, and, ultimately, claims frequency.
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Government Response: Law, Guidance, and Offensive capabilities
The government plans to refresh its National Cyber Strategy. It promises “decisive action” with business, regulators, and law enforcement.
The Cyber Security and Resilience (Network and Information Systems) Bill will update outdated regulations from 2018. It aims to harden water, energy, healthcare, transport, and digital services against severe cyberattacks.
Officials push basic controls through the Cyber Essentials scheme. In the year to June 2025, more than 51,000 certificates were issued. Government figures say organisations with those controls make 92% fewer insurance claims.
Boards now face the Cyber Governance Code of Practice and training packages. The UK also invests in secure-by-design tech standards, offensive cyber operations, and a new Cyber and Electromagnetic Command.
Alongside this, the government backs cyber startups, skills programmes, and professional standards. Internationally, initiatives such as the Pall Mall Process seek to curb misuse of commercial intrusion tools.
For the cyber insurance market, this mix of regulation, guidance, and sector growth signals tighter expectations. Underwriters must track compliance, resilience, and systemic exposures more closely.
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