Nearly a quarter of global boardrooms are unprepared for cyber risks as AI strengthens the hacker’s toolbox, according to research from insurer Beazley.

The survey of 3,500 global business leaders revealed that despite the growing risk landscape, global executives have something of a blind spot over cyber risk, with only 23% of ranking cyber as their top risk this year, down from 34% in 2021. 69% of global firms surveyed believe that their existing cyber defences are currently sufficient to deal with a cyber-attack.

Perceived preparedness against cyber risk is also declining. This year, 75% of business leaders feel resilient against cyber risk, down from 78% in 2022. This dropping sense of preparedness is reflected in the fact that 24% of global businesses plan to invest in cyber security measures this year. In addition, 24% intend to explore insurance options that include risk and crisis management services.

Adoption of AI has been widespread within businesses, and 25% of those surveyed said they are planning to invest in AI to improve their resilience to risk. The technology is also set to have a significant societal impact, with almost two-thirds (68%) of global business leaders agreeing AI will replace jobs in their company.

While AI presents opportunities, the speed of innovation in this space is a key concern for businesses. 27% of global business leaders cited tech obsolescence risk as their biggest threat this year, with just under a quarter (24%) unprepared to manage this risk. However, such technology is also altering the cyber risk landscape, with AI being used by cyber criminals to refine existing attack techniques, such as phishing, while also giving way to new techniques, such as deepfake attacks.

Paul Bantick, global head of cyber risks at Beazley, said: “With technological innovation set to bring about seismic societal change, the growing regulatory burden for firms, and cyber criminals becoming more and more sophisticated, businesses are facing a wave of new threats. The need for robust risk mitigation strategies has never been greater, and insurance can play an important role.

“By leveraging the vast amounts of claims, incident, and threat information data we have and translating that into actionable guidance and advising on elevated ‘always on’ resilience for a range of cyber and technology risks we can help clients to better navigate the risks they face today.”

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