Cyber, Again

Cyber remains the top concern in the technology risk category, with 28% of UK and U.S. respondents listing the issue as their number one risk in 2022, according to a recent survey by Beazley.

But the insurer notes that this percentage represents an 18% real-terms decrease, down from 34% in 2021.

The Beazley survey revealed a “worrying degree of complacency” around active cyber risk management and maintaining resilience to cyber threats, with over 41% of UK and U.S. business leaders feeling “very prepared” to meet the cyber threat, which although down marginally (5%) on 2021, may yet demonstrate over confidence. “We are detecting signs that business leaders may have become a little complacent — even over-confident — about the cyber and technology risks faced by their businesses,” said Patricia Kocsondy, head of U.S. cyber and technology, Beazley.

Another worry: intellectual property. As the new report shows year-on-year, the proportion of business leaders putting intellectual property (IP) risk first has risen dramatically, up 107% in real terms since 2021. Meanwhile, the proportion of businesses putting technology obsolescence top of their list has also risen, with concern increasing more in the U.S. than the UK.

While perceived resilience to cyber and technology risks generally remains relatively high, with 31% of UK firms and 43% of U.S. firms feeling “very prepared” across all four risks within this risk category, resilience perception has dropped across the board, down 9% on average — with IP risk resilience down 12%, and disruption risk down 10%, compared with 2021.

“Mid-market clients, in particular, are struggling with what is being asked of them in terms of funding, budgeting for and repairing technology to keep pace with a range of cyber and technology risks,” said Bala Larson, head of Cyber Client Experience, Beazley. Larson says there is a lot more emphasis on questions around how to handle end-of-life software and hardware issues in underwriting today, with many industries now in catch-up mode to budget for what their insurers require. Cyber hygiene is key to insurability, according to the insurer.

The report’s findings raise a number of concerns:

• Cyber risk still dominates risk radars, but concern has lessened since last year while perceived resilience has dropped to 41%, with many companies distracted by geopolitical turbulence either unwilling or unable to upgrade cyber protections.
• Intellectual property is still lowest on the list of concerns, but risk perception has dramatically increased, up 107% on last year, suggesting this is a potential area where greater risk management and mitigation is needed.
• Technology obsolescence is the number one risk for 27% of UK and U.S. business leaders.

Topics Cyber