In the global insurance sector,Generative AIConsidered an unknown risk for 2024, Paul Bantick, cyber risk director at global specialty insurer Beazley, said both the benign and malign applications of generative AI technology will continue to be an unknown challenge.
Bantick noted that Beazley's Risk & Resilience research shows that as generative artificial intelligence technology rapidly develops, concerns about cybersecurity risks will continue to dominate the risk agenda of corporate executives, with 27% executives believing that cybersecurity will become their main risk in 2024.
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“Based on the growth we’ve seen, we expect the cyber insurance market to triple in size over the next three to four years,” Bantick said.
To meet this demand, Bantick believes a vibrant cyber insurance market is needed, including effective solutions for catastrophe risk, to increase premium capacity in the cyber (re)insurance market and meet the growing demand for insurance.
Additionally, Beazley is the first company to launch a private cyber catastrophe bond, and Bantick said recent developments in the cyber catastrophe bond market are encouraging.firstA 144A transaction occurred.
In reviewing industry developments over the past 12 months, Bantick noted that the emergence of the cyber insurance-linked securities (ILS) market was a major step forward following the launch of Beazley in January 2023.The firstCyber disaster bondsup to dateprogress.
“We hope this will generate continued interest in these deals, providing additional capacity to meet the growing demand for cyber insurance from businesses and society,” he said.
Bantick also said he was “excited to see other cyber catastrophe bond programs progress this year.” Looking ahead to 2024, Bantick explained that the company predicts the industry will see an increase in the number of cyber bonds as the market “evolves, grows and becomes more mainstream.”