Cyber ranks as businesses' top concern as AI amplifies the risks: Travelers

By Erin Ayers, Front Page News

Cyber risk awareness and preparedness may be at its highest point yet, but businesses also worry that artificial intelligence (AI) will upend everything they know about the perils of cyber, according to the latest Risk Index from Travelers.

“Businesses view cyber threats as a serious concern, and they’re getting smarter and more prepared – investing in controls, building confidence and turning to their insurance carrier for guidance,” said John Menefee, vice president and enterprise cyber lead at Travelers, in a statement. “At the same time, the rapid rise of AI is creating opportunities for attackers just as companies are making progress on basic defenses.”

AI-related cyber events ranked as the second-highest specific cyber concern, almost tied with traditional security breaches via unauthorized access to computer systems, the insurer said in its annual report.

Menefee added, “The message is clear: Organizations of all sizes should treat cyber threats, especially AI-related cyber risk, as a core business issue and take steps to strengthen defenses.”

Cyber threats edged out economic uncertainty, last year’s top concern, along with medical cost inflation, impact of the global economy, and geopolitical conflict.

Well over half (55%) of businesses say they worry about AI-related cyber threats. This hasn’t stopped them from adopting the technology in their day-to-day, though, with 89% of organizations using AI tools. However, only 59% say they have formal governance and established business practices for how employees use those tools.

“This 30-point gap really stands out, and it cuts both ways,” Menefee said. “Companies are focused on what cybercriminals are doing with AI, and that concern is justified. However, companies should be equally focused on the risks created by their own AI use when the right practices and policies aren’t in place.”

Cyber insurance take-up soared to its highest level since 2018, at 70% of respondents. A majority of respondents (81%) believe that having the right cyber coverage is “critical to the well-being of their company.”

The survey also showed an uptick in cybersecurity investment, with the use of firewalls and data backups rising from 76% to 81% year-over-year, and the use of multifactor authentication rising to 72% from 60%.

However, 50% of small businesses still do not carry cyber insurance, compared to 24% and mid-sized firms and 18% of large businesses, the survey revealed.

Travelers outlined the top five cyber events experienced by businesses in the report, with 38% of businesses facing system glitches or user error; 33% suffering a security breach; 31% seeing employees putting data or systems at risk; 25% experiencing unauthorized access to operational control systems; and 24% falling victim to a vendor-related cyber event.

Managing Editor Erin Ayers can be reached at [email protected]