As per GlobalData’s 2023 UK SME Insurance Survey, it is evident that many businesses may be vulnerable to the damages of cyberattacks. Credit: thinkhubstudio via Shutterstock.

The rise of Generative AI (Gen AI) is leading to increased cyber threats for insurers, highlighting the need for enhanced cybersecurity measures. However, there is a significant protection gap in addressing these evolving threats effectively.

GlobalData’s Q2 2023 poll on Verdict Media sites, targeted at insurance executives, has revealed a concerning trend within the insurance industry: 58.5% of industry professionals anticipate an increase in cyberattacks facilitated by AI. These cyber threats, particularly those driven by Gen AI, have raised alarms across the sector. Munich Re has underscored the escalating risks associated with rapid technological advancements, with ransomware playing a significant role in recent cyber incidents.

The findings from GlobalData further underscore the gravity of the situation. With UK cyber insurance penetration for SMEs at 14.7% in 2023, as per GlobalData’s 2023 UK SME Insurance Survey, it is evident that many businesses may be vulnerable to the damages of cyberattacks. Despite the low cyber penetration rate, GlobalData’s 2022–2023 UK SME Insurance Surveys reveal that SME concerns about cybercrime have risen from 50.7% in 2022 to 57% in 2023. This highlights how imperative it is for industry providers to acknowledge AI as a serious threat and ensure that SMEs have adequate insurance coverage to mitigate potential damages.

Munich Re’s Cyber Risk and Insurance Survey 2024 presents a stark reality, indicating that an alarming 87% of global decision-makers believe their companies are inadequately protected against cyberattacks. This protection gap highlights the urgent need for enhanced cybersecurity measures and increased awareness. Munich Re has also pointed out that there were twice as many software supply chain attacks in 2023 as there were in the preceding three years combined, further emphasizing the evolving nature of cyber threats and the necessity for preventive strategies.

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