The rapid evolution of generative artificial intelligence technology is reshaping the cyber risk landscape, requiring businesses to build greater resilience to the evolving threats, as GenAI augments both threat actor and defensive capabilities. Cyber insurance, therefore, has a key role to play in supporting businesses and broader society in manage this emerging risk.

This is the view of Lloyd’s, whose latest report labels GenAI one the most “complex and critical risks threatening national security and businesses today”.

Despite the advanced capabilities of GenAI technologies and applications of large language models to cyber crime, material impacts on the cyber threat landscape have so far been minimal – something Lloyd’s attributes to the industry’s safety mechanisms and effectiveness of AI model governance. Cost and hardware barriers have also contributed to the prevention of widespread misuse by threat actors, it says. But not for long, it warned, flagging the risks to people and property – both tangible and intangible.

“The impact of GenAI on the cyber landscape is likely to increase the frequency, severity and diversity of smaller scale cyber attacks, which will grow over the next 12-24 months, followed by a plateauing as security and defensive technologies catch up to counterbalance their impacts,” Lloyd's stated.

Commenting on the findings of the report, Dr Kirsten Mitchell-Wallace, director of portfolio risk management, Lloyd’s, said: “Lloyd’s has been exploring the complex and varied risks associated with AI since 2016 and its developments present both opportunities and risks for businesses and the insurance industry.

“When considering the threat landscape, we must stay responsive to these rapidly changing technologies, learn from them and seek to make the most of the efficiencies they bring. Generative AI is not the first - and won’t be the last - disruptive technology to impact the cyber threat landscape, so it is critical that business improve their risk mitigation, security and defence technologies, as well as seek appropriate risk transfer today, more than ever before.”


SUGGESTED READING

Generative AI, or GenAI, refers to deep-learning models designed in theory to generate high-quality text, images and other content based on the data they were trained on.

Large language models, or LLMs, are a type of artificial intelligence trained on immense amounts of data, making them theoretically capable of understanding and generating natural language and other types of content to perform a wide range of tasks.

For more on artificial intelligence, its capabilities and regulatory developments around the emerging technologies, read our recent interview with Alexander Amato-Cravero.

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