Despite the excitement surrounding artificial intelligence’s (AI) potential, businesses should take stock and ensure that they are taking a considered approach as they implement the technology into their systems, says Adrian Cox, Chief Executive Officer (CEO) of Beazley, the specialist insurer.
“AI and how it can transform business has dominated conversation this year. This is likely to continue into 2025, with our latest Risk and Resilience report finding that 80% of companies are planning to integrate AI into business practices,” Cox commented.
“But are businesses leaping in without looking and possibly opening themselves up to an accusation of ‘AI-washing’?”
He continued: “Amid the excitement surrounding AI’s potential, businesses should take stock and ensure they are taking a considered approach as they implement AI, making sure that investment in AI does not divert attention away from getting the basics right, particularly around cyber risk.”
Earlier this year, a poll ran by Reinsurance News suggested that AI-powered threats will drive the biggest losses across the cyber re/insurance market over the next two years.
It’s important to understand that this should not come as too much of a surprise, given the widespread adoption of AI technology across the re/insurance sector in recent years.
Going back to Cox, he states that businesses will benefit from exercising caution and not overstating the use or impact of AI on their services and profitability.
Adding: “In the US for example, we have already seen a number of high-profile cases cracking down on AI-washing, including the Securities and Exchange Commission’s fines on investment advisors Delphia and Global Predictions. We are likely to see similar actions in other regions.”
He concludes: “AI certainly has an important role to play in the future of business, but as with the Railroad or Dotcom Booms and Busts before it, the route to AI success may not be smooth.”
A paper released earlier this year by Guy Carpenter highlighted how the rapid adoption and evolving deployment of AI in recent years has heightened the risk of cyber event aggregation from both malicious and accidental sources.
The paper identified four key ways in which AI development and deployment contribute to this aggregation: software supply chain risk, expansion of the attack surface, increased data exposure, and growing usage in cyber security operations.
