Cyberattacks are a major risk factor with a “significant impact” over the next 12 months, insurers have warned.
FT Commercial Insights' exclusive research into the global risks facing businesses around the world has identified AI and cyber, financial risk, regulatory change and geopolitical volatility as the “key risks” for the year ahead.
Globally, fear of cyber-attacks and ransomware threats has been ranked as the top business risk that will have a significant or moderate impact on insurance companies' business lines for the remainder of 2024 and into 2025. .
In Europe, including the UK, 72% of respondents to the survey of the world's largest insurance companies cited cyberattacks as one of their top three risks, 78% of financial risks, This is slightly behind 75% of respondents.
Regulatory risk ranked fourth in the UK and Europe, with a 69% chance of having a significant or moderate impact on the business.
The disruptive impact of emerging technologies such as AI has been ranked by UK and European insurers as having a 65% chance of having a major or moderate impact on their business over the next 12 months.
The figures were compiled in FT Commercial Insurance GIST 2024, a global study conducted by FT Commercial Insights and shared with FT Adviser.
The effects of climate change and the need for financial firms to become carbon neutral, as well as social unrest and demographic changes, have also been cited as potential headwinds, as previously identified as part of the FT Commercial Insights team. This is a long-standing problem. study.
But the survey found two concerns in particular are on the rise.
These were the impact of emerging technologies and AI on the insurance industry, and regulatory changes.
Overall, the 2023 survey saw a double-digit increase, according to the study.
Regulatory change as a concern for insurers increased from 60% to 74% over the year, and the impact of AI increased from 63% to 73% globally.
Reinsurance company Swiss Re has been discussed as a growing threat to the impact of AI. “Cyber-attacks pose a serious threat to all organizations, and the threat is growing by the day,” Swiss Re said in a recent paper.
Commentators recently spoke to FT Advisor about the rapid movement of the 'fifth industrial revolution' and its impact on financial services.
Kevin Sloan, senior policy advisor at industry body PIMFA, told FT Advisor last month that while AI remains an “opportunity for most companies to explore”, “the regulatory environment and responsibility for future AI cases is changing”. “Clarification may be compromised,” he said. The potential for a decline is not yet fully clear. ”
As such, the importance of ensuring business security while exploring ways to increase profitability through AI and cyber technology has become a priority for owners and boards alike.
