"The challenge for insurers is that as their businesses become more complex - with new hardware, cloud computing and third-party services in longer supply chains - cyber vulnerabilities unfortunately increase."
- Andy Moore, insurance partner at PwC
The Insurance Banana Skins 2023 report, is based on responses from insurers in 39 territories, with over three-quarters of the respondents working in the life and non-life sectors. Opinions on the biggest risks over the next three years from non-practitioners such as regulators, consultants, analysts, and other professional service providers were also included.
Above all, the report found that cyber crime continues to be the greatest threat to insurers’ operations for the second year running. This was followed by, regulation, climate change, technology, human talent, macro-economy, artificial intelligence, interest rates, cost reduction, and change management. Of those, climate change, human talent, macro-economy, and cost reduction ranked higher than the previous year; artificial intelligence was the only new entry.
Alongside the potential damage caused by cyber criminals, respondents were concerned about the prospect of mounting costs that could occur to assist with mitigating potential bad actors. Especially since investing in defence will become more challenging, due to the growth of internet-connected devices and global reliance on cloud/third-party services.
The report also revealed growing fears that artificial intelligence could be used as a powerful “new weapon” to breach insurers’ security. Several respondents focused on the state-sponsored dimension of cyber crime, which has potentially been exacerbated by the current political climate.
Commenting on these findings, Andy Moore, insurance partner at PwC, has said:
“For large-scale insurers, the prospect of a serious cyber attack is daunting, especially as organisations rightly look to new digital solutions to promote efficiencies, improve customer engagement and shore up the critical bottom line.
“The challenge for insurers is that as their businesses become more complex - with new hardware, cloud computing and third-party services in longer supply chains - cyber vulnerabilities unfortunately increase.
“Criminals are becoming more adept at monetising their breaches, and with the prospect of sensitive customer data leaks, it seems that for the insurance sector, the ability to be resilient to cyber-attacks is a core requirement, with cyber security being less a 'bolt on' and rather something to be designed into the business and IT architecture.”
