The report highlights the evolving global business risk landscape in relation to cyber and technology risks, including ransomware attacks and the threats posed by artificial intelligence (AI).
Based on a survey of over 2,000 business leaders and insurance buyers from the UK, US, Canada, and Singapore, Beazley’s data reveals a shift in perceptions around cyber and technology risks. The perceived threat of cyber risk to global business leaders peaked in 2021 at 34%, but has decreased to 27% over the past two years.
Despite the decline in perceived cyber risk, the report indicates that resilience to such risks has not strengthened, but rather fallen from 80% to 74% compared to the previous year. Additionally, the threat posed by new technologies, such as AI, which had been consistently decreasing since 2021, is now predicted to be a growing concern in the next 12 months.
The economic impact of cybercrime on businesses worldwide continues to rise, with costs projected to reach a staggering US$10.5 trillion by 2025, a threefold increase since 2015. However, boardroom focus on cyber risk appears to be diminishing, raising concerns about preparedness for potential cyber threats.
While cyber risk perception has decreased, attention has shifted to the risks associated with new technologies. Executives are increasingly concerned about disruptive technologies, such as AI, with 26% of global business leaders identifying the failure to keep pace with technology as a key concern. However, resilience to technological risks has declined, and more than one-fifth of businesses (21%) feel ill-equipped to manage the pace of change.
Furthermore, the report highlights a growing concern among business leaders regarding the theft of intellectual property (IP). In 2023, 24% of business leaders ranked IP theft as their top risk, doubling from 11% in 2021. Alarmingly, over a quarter of businesses (26%) feel unprepared to mitigate this risk effectively.
The data also reveals that small and medium-sized businesses (SMEs) are increasingly aware of their limited ability to mitigate cybercrime threats. The report indicates that SMEs feel more exposed than ever, with businesses reporting a decrease in preparedness for cyber risks in 2023 compared to the previous year.
Paul Bantick, Group Head of Cyber Risks at Beazley, expressed concern over the declining focus on cyber risk, stating, “Business leaders are finding it a struggle to keep up with the constantly evolving cyber threat. But worryingly, they appear less concerned by cyber risk than a couple of years ago.”
Bantick emphasized the importance of businesses remaining vigilant and adopting robust risk mitigation strategies. He urged the insurance industry to work closely with clients to address emerging cyber and technology risks and improve resilience.
