Beazley warns over boardroom cyber risk focus

Boardroom focus on cyber risk appears to be diminishing, according to Beazley in its latest Risk & Resilience report, Spotlight on: Cyber & Technology Risks 2023.

The data shows how perceptions around cyber and technology risks, from ransomware and other cyber-attacks to the threats posed by AI, are changing the global business risk landscape.

According to the report, the economic impact of cybercrime on business across the globe continues to reach new levels, with the cost predicted to reach US$10.5 trillion by 2025, a 300% increase since 2015. Yet, it adds, the perceived threat of cyber risk to global business leaders peaked in 2021 (34%) and over the past two years, the risk perception has dropped (27%). In 2024, it is predicted to remain at 27% while business preparedness for this risk continues to decline.

As cyber fears decrease, the technological risk landscape has fragmented, with executives nearly as concerned about the perceived threat posed by disruptive new technologies, such as AI, as the risk of cybercrime, according to Beazley. Failing to keep pace with technology and adapting to new innovations is an issue that 26% of global business leaders identified as their key technological concern, yet resilience to this threat is on the decline and more than a fifth (21%) of all businesses feel they cannot maintain the pace of change.

Leaders are also turning their attention to other concerns such as the risk of theft of their intellectual property (IP) with 24% of business leaders ranking it as their top risk in 2023, more than double what it was in 2021 (11%). IP theft has also become the cyber and technology risk for which businesses across the world feel least prepared, with more than one in four businesses (26%) reporting they feel ill-equipped to mitigate this risk.

Paul Bantick, group head of Cyber Risks, Beazley said: “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. This could be because they have been lulled into a false sense of security as the war in Ukraine led to a temporary reduction in the ransomware threat level when a number of cyber gangs splintered, but this situation is only temporary and should not be viewed as the new normal.”

“The emergence of AI and other tech innovations as well as the increase in concerns over IP theft are now front of mind for many business leaders globally,” he added. “These threats are fast evolving and unfamiliar, with many companies being caught on the back-foot when dealing with the risk.”