The intersection of artificial intelligence (AI) and the escalating threat of cyberattacks took centre stage in a recent roundtable convened by Insurance Business Canada, which sought to shed light on the evolving landscape of the cyber insurance market in 2023.
While AI integration is widespread across various industries, the roundtable emphasized that it doesn’t eliminate risk but instead introduces new exposures. The consensus among experts in the panel is that organizations must implement robust security and compliance controls to navigate these challenges.
Chris Pitcher, AVP and head of cyber at Arch Insurance, winner of The Best Young Insurance Professionals Under 35 in Canada, pointed out that generative AI poses a heightened risk compared to the type of reactive AI that is commonly utilized by companies.
Michelle Lawson, cyber practice leader at WTW, stressed the necessity for proactive communication between companies exploring new technologies and their insurance brokers to prevent surprises during policy renewals.
The discussion also delved into the nefarious applications of emerging technologies by bad actors. Laura Martin, CFC's cyber development manager in Canada, highlighted the emergence of “evil versions” of AI that hackers use to launch phishing attacks.
But beyond the attention-grabbing headlines surrounding emerging technologies and ransom gangs, human error remains a persistent challenge in organizations’ efforts to boost their cyber resilience.
“The human error element is really key, and something that I hammer to a lot of my brokers in that for CFC it represents 75 percent of losses,” said Martin, who added that many insurance policies do not offer coverage for related incidents such as fraudulent funds transfers.
The experts in the panel also emphasized the importance of service over price when it comes to selecting cyber policies and insurance partners.
Martin identified proactive services, effective communication, incident response capabilities, and claims prevention as crucial considerations for both brokers and insurance buyers.
“Cyber insurance policies are very much no longer reactive – it’s very much a proactive solution,” she said.
Lawson echoed this sentiment, citing how cyber insurance has evolved to take on the dual role of providing both coverage and service for clients.
What other cyber threats should insurers and brokers keep in mind? Access the full roundtable discussion for more information on the evolving landscape of Canada’s cyber insurance market.
