Cyber events that cause reputational damage can result in shareholder value dropping by more than a quarter, according to new research from Aon.

The firm’s latest annual Cyber Risk Report found that last year, the frequency of reported cyber incidents grew by 22%, with malware and ransomware attacks being the most likely to trigger reputational damage, accounting for 60% of all reputation risk events, despite making up only 45% of total cyber incidents.

Of the 1,414 cyber events Aon analysed, 56 developed into reputation risk events, defined as cyber incidents that attract significant media attention and lead to a measurable decline in share price, with the study finding cyber events resulted in a 27% fall in value last year. 

The findings build on Aon’s 2023 research, which showed that major cyber incidents led to an average 9% decline in shareholder value over the following year, figures which could be particularly alarming given the recent spate of high-profile attacks on big-name brands.

The report also highlights the growing challenge of managing uninsurable risks. 

While cyber insurance can help transfer some financial exposure, reputation risk remains largely non-transferable, making proactive risk management and crisis response essential.

According to Aon, the persistence of cyber-attackers last year saw the number of claims grow, with midsized organisations sitting between $100 million (£74m) and $2 billion (£1.4bn) filing more claims than any other group, representing 52% of all matters.

Recommended reading

• 87% of Firms Hit By AI Cyber-attacks
• Inside the Aftermath: What Really Happens When You Get Hacked
• Report: AI is Supercharging a Ransomware Boom

The figures also show that those firms investing in their cyber preparedness were able to reduce the cost of a breach by almost $500,000 (£370k), as well as restore systems and regain access to data faster than those without an incident response plan.

Aon found that stronger cyber controls across the board had an impact on ransom payouts, too, with the average reported payments dropping by 77% over the last year. 

“As cyber threats grow more complex and interconnected, companies need a clearer view of their exposure, stronger alignment between cybersecurity and insurance strategies, and the tools to make better, data-driven decisions. Aon is uniquely positioned to support clients through these challenges,” said Brent Rieth, global cyber leader at Aon.

“Our latest research underscores the importance of proactive risk mitigation. Organisations that invest in preparedness and resilience are far better positioned to avoid the reputational and financial fallout that can follow a cyber event.”