Insurance companies will play a vital role in securing businesses against cyber risks amid the increase of AI use in daily operations, according to Beazley’s 2024 Risk & Resilience research.
While technology offers significant opportunities and benefits, it also presents heightened risks for businesses, Beazleysaid. This year’s report found that 27% of the respondents are concerned about tech obsolescence risk in the face of new technology, including AI.
Sixty-eight (68) percent of the respondents believe AI will lead to jobs being replaced in their company this year, with 25% believing that the threat posed by disruptive technologies is the “top risk” they face this year.
According to Forbes, cyber crime is expected to cost companies worldwide US$10.5 trillion annually by 2025, up from US$3 trillion in 2015.
Still, Beazley’s research showed that cyber risk continues to be a “blind spot” for business executives as they fail to realize the evolution of cyber crime. Only 26% of the surveyed executives ranked cyber as their top threat this year, down from 34% in 2021, according to the research. Perceived cyber risk preparedness for executives also dropped to 75% this year from 80% in 2022.
Patricia Kocsondy, head of global cyber digital risks at Beazley, said that cyber crime networks are becoming more industrialised as the nature of attacks becomes more sophisticated. “Cyber criminals exploit businesses for financial gain,” Kocsondy said.
In particular, the healthcare sector is increasingly being targeted by cyber criminals because private patient information is highly sensitive and highly valuable. The industry also continues to use outdated technology, coupled with limited budgets for cyber upgrades and heightened scrutiny from regulators to protect customer data, leaves the sector vulnerable to cyber attacks, Beazley said.
“The combination of high reward, multiple, weak entry points and limited security has seen cyber threat actors zero in on the sector with a series of high-profile breaches in recent years,” Beazley said.
In order to respond to the heightened risk brought about by AI, Marcello Antonucci, Beazley claims team leader, said that there has to be a paradigm shift in businesses’ approach to cyber risk management. “Firms should be seeking to future-proof their resilience to cyber risk,” Antonucci said.
Insurance companies will play an important role in helping firms navigate the current and future cyber and tech risk landscape.
According to Beazley, 47% of global executives surveyed said their trust in insurers has increased and 24% are seeking to explore insurance options, including crisis and risk management services. Insurers and brokers must continue to build long-term partnerships with clients in order to boost the latter’s cyber resilience.
“By boosting their cyber resilience, and by working in partnership with their insurer, businesses can not only reduce the risk of being attacked, but they can also increase their ability to respond to an incident more effectively,” Beazley said.
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