Business Email Compromise Claims Rise 30 Percent
Automated AI phishing kits drive the surge, threatening small firms that currently lack adequate cyber insurance.
Updated on Oct. 16, 2026 in Cybersecurity
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Business email compromise (BEC) claims frequency surged 30 percent in the second half of 2025 compared to the same period in 2024. This increase is driven by the deployment of automated phishing kits that utilize artificial intelligence to bypass multi-factor authentication.
Why it matters
Automated attack tools allow cybercriminals to target micro businesses with higher profitability, creating a landscape where small firms are increasingly vulnerable. As BEC claims rise, the widespread lack of cyber insurance among small enterprises threatens to leave them financially exposed.
The EvilTokens phishing kit, which enables AI-driven email drafting and multi-factor authentication bypass, has compromised over 12,000 inboxes across 10,000 organizations. The toolkit is available for an upfront cost of $1,500 and a $500 monthly fee, significantly lowering the barrier for entry for automated attacks.
The players
Coalition
An insurance provider that maintains a portfolio of 110,000 policyholders and tracks cyber claims data.
Markel UK
A specialist insurer that tracks cyber coverage trends and survey data among small and medium-sized enterprises.
The details
The EvilTokens kit operates by intercepting session tokens, allowing attackers to gain unauthorized access to mailboxes without requiring the user's password. Once inside, the software uses automated rules to hide the intrusion from the victim and scans the mailbox for sensitive financial data. These tools then draft deceptive email threads to facilitate business email compromise, enabling attackers to impersonate known contacts and request fraudulent payments.
Timeline
2022: Total claims frequency baseline was established.
2024 H2: This period serves as the baseline for the 30 percent rise in BEC claims.
2025: Funds transfer fraud frequency declined by 18 percent.
2025 H2: BEC claims frequency increased by 30 percent.
2027: BEC claims frequency is projected to rise 60 to 100 percent.
The Tech Race
While funds transfer fraud frequency dropped by 18 percent in 2025, the shift toward automated BEC tools indicates an evolution in criminal methodology. This divergence suggests that attackers are moving away from manual fraud attempts toward scalable, AI-assisted operations that target micro business inboxes.
Micro businesses currently face a high threat level, with 42 percent reporting attacks and 44 percent of SMEs lacking any cyber insurance coverage. While average BEC claims are currently under $30,000, the projected 60 to 100 percent increase in frequency by 2027 suggests that financial risk exposure for these firms will accelerate significantly.
The takeaway
The transition to automated, AI-enabled phishing kits is turning business email compromise into a high-volume, low-effort industry for attackers. Organizations should monitor their cyber insurance sublimits, particularly the common $250,000 cap for funds transfer losses, to ensure coverage matches current risks.
Further reading
Explore deeper analysis on the evolving threat landscape in our Cybersecurity section.
Source note: This article includes information reported by Insurance Business.
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