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‘Critical’ That Businesses Improve Risk Mitigation and Security as AI Threat Increases, Says Lloyd’s

Lloyd’s, the insurance and reinsurance marketplace, has published a new report, revealing how the rapid evolution of generative artificial intelligence (AI) technology could impact the cyber risk landscape, requiring businesses to build greater resilience to these evolving threats.

Lloyd’s report, ‘Generative AI: Transforming the cyber landscape‘, spotlights cyber as one of the most complex and critical risks threatening national security and businesses today, with the dynamics of the risk landscape already posing many challenges.

The emergence of AI, particularly unrestricted advanced generative AI models, appears set to completely reshape the cyber landscape, augmenting both threat actor and defensive capabilities.

Dr Kirsten Mitchell-Wallace, director of portfolio risk management at Lloyd’s
Dr Kirsten Mitchell-Wallace, director of portfolio risk management at Lloyd’s

Dr Kirsten Mitchell-Wallace, director of portfolio risk management at Lloyd’s, commented: “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 businesses improve their risk mitigation, security and defence technologies, as well as seek appropriate risk transfer today, more than ever before.”

However, businesses cannot do this without support. Cyber insurance also has a key role to play in helping businesses understand and manage this ever-evolving threat. Businesses and the insurance industry must take proactive steps to manage the potential changes to the threat landscape.

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While the advanced capabilities of generative AI to support cybercrime have been widely reported, Lloyd’s explained that material impacts on the cyber threat landscape have so far been minimal.

The financial industry’s safety mechanisms, the effectiveness of AI model governance and hardware barriers appear to be successfully preventing widespread misuse by threat actors. However, as the space evolves, and as generative AI tools become more accessible, the risk continues to grow.

In time, Lloyd’s predicts that more opportunities for threat actors to use the tools maliciously will arise, leading to more harm to people, property, and tangible and intangible assets.

The impact of generative AI on the cyber landscape also looks likely to increase the frequency, severity, and diversity of smaller-scale cyber-attacks, which will grow over the next 12 to 24 months, followed by a plateauing as security and defensive technologies catch up to counterbalance their impacts.

Lloyd’s is continuing to work alongside governments, regulators, security experts and insurers to understand and underwrite the risks associated with AI, partnering with industry, engaging policymakers, and supporting sustainable innovation.

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