‘Spotlight on: Cyber and technology’, a new research report from Beazley, shows a drop in business leaders’ confidence about their resilience to cyber and technology threats. However, the report’s authors say that they are detecting signs that some leaders may have become over-confident about the cyber and technology risks faced by their businesses.
Key findings in the report include:
- Cyber is the leading concern within the cyber and technology risk category for all respondents in 2022, with 28 percent of business leaders listing it as their number one risk overall. However, fewer business leaders in the UK and US cited it as a leading risk compared with last year. Resilience perceptions have fallen since 2021, down two percentage points at 41 percent. A lessening concern about cyber risk appears to be tempered by some erosion of business leaders’ confidence about the readiness of their firms’ cyber protection.
- Faced with continuing capital constraints some businesses appear reluctant to commit to the cost of transforming systems and processes potentially leaving them open to greater cyber, disruption and technology obsolescence risks going forward.
- Tech disruption is less of a concern than last year, but the perception of resilience has also dropped for UK and US business leaders, down 4 points at 36 percent. The double whammy of a depressed economy and the failure by some to bounce back from the pandemic as quickly as their competitors could leave them open to disruption by more agile rivals.
- Technology obsolescence has moved up the risk scale since last year, cited as a leading concern by around 27 percent of UK and US leaders, and swapping places with ‘disruption’. Resilience has also dropped, possibly as companies struggle with the cost and effort of updating or replacing legacy systems.
- The low level of preparedness for intellectual property (IP) threats at the same time as concern is increasing, raises a red flag. IP still features lowest on business leaders’ risk registers, with only 21 percent of all respondents putting it first. However, in the UK and US, the proportion of business leaders putting IP concerns top has increased by 107 percent since last year.
- As companies confront issues such as end-of-life technology, enhanced cyber risk linked to the geopolitical situation, and the impact of inflation on business and investment, leaders will nonetheless need to focus on improving cyber hygiene. With pricing for cyber insurance rising, insurers are becoming more selective about which cyber risks they write. Cyber insureds therefore need to regard cyber resilience and risk management as much more than a tick-box exercise, as they seek to protect intangible assets and ensure business continuity.
