Outdated Tech Edges Cyber Risk as a Business Concern – Risk & Insurance

Global business executives are increasingly worried about the risk of their technology becoming obsolete, while concern over cyber threats is declining, despite the evolving and persistent nature of such threats, according to a survey by Beazley PLC.

Over a quarter (27%) of executives are concerned about the risk of their technology becoming obsolete, especially in the face of innovations like AI, a figure that is projected to rise to 28% by 2025. One in four executives believe the threat posed by AI and other disruptive technologies is the top risk they face this year, with 68% of respondents agreeing with statement that AI will lead to jobs being replaced in their company.

“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,” the report stated.

Cyber Risk Concerns Declining Despite Evolving Threats

Meanwhile, concern over cyber risk is dropping, with 26% of business leaders ranking it as their top risk today, down from 34% in 2021, the survey found. Yet, while concern around cyber risk is declining, the threat of cyber crime is expected to become more sophisticated and persistent, according to Beazley’s report.

“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,” the report’s authors stated.

Cyber crime has evolved into a highly specialized industry run by ruthless threat actors motivated primarily by financial gain. It is projected to cost companies $10.5 trillion annually by 2025, representing a 15% annual growth rate.

Despite this trajectory, perceived cyber risk preparedness among executives surveyed has dropped to 75% this year from 80% in 2022. Despite that decline in preparedness, 24% of respondents intend to invest in improved cybersecurity.

One sector increasingly targeted by cyber criminals is health care, where 25% of business leaders admitted they are unprepared for the current cyber threat. Private patient data is highly sensitive and, consequently, highly valuable to criminals seeking to exploit vulnerabilities in health care systems.

Supply chains have also become an additional focus for cyber criminals as firms increasingly outsource services to third parties that hold sensitive client data, Beazley noted. This trend exposes companies to greater risk of data breaches and cyberattacks through their external vendors and suppliers.

Insurance Seen as Vital Safety Net

As the risk landscape continues to evolve, insurance is increasingly being seen as a vital safety net. The survey found 47% of executives said their trust in insurers has increased, and 24% are seeking to explore insurance options that include crisis and risk management services.

“With the sophistication of the cyberattack environment, it is surprising that only around 1 in 10 (11%) of the global business leaders we surveyed believe that they do not have adequate cyber provisions in place to defend against a cyberattack today. Now is not the time to become complacent,” stated Melissa Carmichael, head of U.S. cyber risk for Beazley.

Access the full report here. &