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Spotlight on

Cyber & Technology Risk 2024 

Resilience in a game-changing environment

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In today’s era of accelerating cyber and technology risks, organisations are on the front line. No matter the size of the business or what sector they operate in, they will face challenges.

The recent CrowdStrike IT outage is a timely reminder of how fragile the global technology networks are and what can go wrong when one link in the chain makes an error or costly mistake.

Our 2024 Risk & Resilience research reveals that while technology offers significant opportunities and benefits, it also presents new and heightened challenges for business leaders, many of whom are unprepared for the current and future landscape.

We explore the trends in cyber crime and artificial intelligence (AI) while discussing how regulatory risk and technology obsolescence is creating new challenges for business leaders.

Key takeaways

  • For brokers

    1. A growing blind spot around the nature of cyber risk. 75% of global executives surveyed believe they are preparedii for cyber risks. Our claims data shows us this is not the case, and there is an urgent need to educate firms on the changing face and sophistication of cyber crime and the importance of ‘always on’ cyber resilience strategies.
    2. C-suite executives are ultimately responsible for their firm’s risk management of cyber and technology risks. If they get this wrong it is likely to not only result in business interruption, reputational damage and potential regulatory issues, but also directors’ & officers’ liability claims. Firms need insurance programmes that cover the full spectrum of cyber risks they face.
    3. Role of insurance. 24% of our survey’s respondents are looking to improve their resilience via insurance and, in particular, insurance with additional risk management services offered. Clearly, many recognise the benefits of the insight and expertise that the insurance industry can offer.

  • For businesses

    1. Innovation walks hand in hand with risk. While the advent of new technologies, such as AI, offers the opportunity to streamline operations and increase efficiency, it also presents significant risk. The pace of innovation can leave firms exposed to risk linked to tech obsolescence, more sophisticated phishing attacks, and accusations of bias in new AI systems.  Staying ahead of the curve has never been more important.
    2. As the world digitalises and moves into the Cloud, businesses are being targeted by cyber criminals through their suppliers. With cyber criminals favouring the path of least resistance, the need for businesses to assess their third party relationship vulnerabilities is increasingly important.
    3. While insurance can provide an important safety net, no business is immune to the threat posed by cyber crime. Elevated risk requires elevated resilience and firms need to be on the front foot and use all the tools at their disposal to defend against a cyber incident. Businesses can work with insurers to help build resilience and improve their cyber security.

Read on...

Top findings from our Risk & Resilience cyber & technology research

Global business leaders told us

1 %

Feel exposed to tech obsolescence challenges ranking it as their top risk now, with 28% anticipating this exposure to continue in 2025.

1 %

Their concern over cyber risk is dropping – with 26% ranking this as their top risk, compared to 34% in 2021.[iv] Yet, perceived cyber risk preparedness[ii] is down to 75% compared to 80% in 2022.[v]

1 %

Plan to invest in cyber security this year and plan to explore insurance options that include risk and crisis management services.

1 %

A quarter (25%) believe AI and other disruptive technologies are the biggest risk they face this year.

1 %

AI is seen as a popular way to build business resilience, with 25% planning to invest in it this year, and 68% believing that AI will lead to jobs being replaced in their company.[i]

1 %

IP risk continues to rise up their risk agenda, with 23% ranking this a top concern, up from just 11% in 2021 [3], and a quarter (25%) feel unprepared to manage IP risk.[iii]

The Role of Insurance

In the face of an ever-evolving threat landscape, specialty insurers must harness the power of expertise to provide businesses with vital insights and a safety net. This year, 24% of global business leaders are seeking to explore insurance options that include crisis and risk management services, and 47% of global leaders said their trust in insurers has increased.

We have a crucial role to play. By leveraging claims, incident data, and threat information data and insight and translating this into actionable guidance to help elevate resilience for a range of cyber and tech risks, we can help our clients to better mitigate these ever-evolving risks.

 

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Next Steps

Being reactive is no longer enough.

In this era of escalating threats, effective risk management requires cutting edge security expertise, and the latest risk insights - fast.

Businesses must build a living and breathing cyber ecosystem, a long-term risk management strategy that seeks to pre-empt the risks, adapt risk mitigation strategies as risks morph and evolve, and considers how they will respond and cope in the face of an incident.

Having the right long-term, insurance partners on side, has never been more important.

[i] ‘Somewhat agree’ and ‘Strongly agree’ answers combined.
[ii] ‘Moderately prepared’ and ‘Very prepared’ answers combined.
[iii] Not very well prepared’ and ‘Not at all prepared’ answers combined.
[iv] This figure is based on research undertaken in January and February in 2021 with 1,000 executives of firms based in the UK and US of varying sizes, operating in 10 broad industry sectors with international operations.
[v] This figure is based on research undertaken in January 2022 with 2,000 executives of firms based in the UK, US, Canada and Singapore of varying sizes, operating in 10 broad industry sectors with international operations.

The information set forth in this document is intended as general risk management information. It is made available with the understanding that Beazley does not render legal services or advice. It should not be construed or relied upon as legal advice and is not intended as a substitute for consultation with counsel. Although reasonable care has been taken in preparing the information set forth in this document, Beazley accepts no responsibility for any errors it may contain or for any losses allegedly attributable to this information. BZ CBR 119.

 

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