Howden's 2024 cyber insurance report

Resurgent ransomware activity

Ransomware continues to dominate the cyber loss environment. Strengthened cyber resilience is paying dividends for policyholders amidst the heightened threat landscape, with cyber attacks increasing their lead as the top global risk in Allianz’s Risk Barometer.

A rising number of ransomware attacks now involve the theft of sensitive personal or commercial data for extortion purposes (i.e. threatening to leak data into the public domain). This not only increases the complexity of incidents but also brings a greater risk of reputational damage. 

Companies that have invested in risk controls and crisis management are now less susceptible to material impacts, rebalancing cost-benefit considerations for some firms over whether to pay ransoms. Furthermore, the growing prevalence of double and even triple extortion has undermined the assumption that paying a ransom will put a stop to the hack.

As cyber lives up to its dynamic reputation, the value of insurance is being brought into even sharper focus as it incentivises (and helps to implement) better cyber hygiene, strengthens resilience and indemnifies losses.

The rise of Gen AI

While ransomware and systemic risk continue to dominate the cyber threat landscape, another major and relatively new development has been the explosion of Gen AI. 

Two emerging conclusions on how Gen AI will reshape the threat landscape over the next few years are becoming increasingly clear: 

• Sophisticated, state-backed threat actors will use Gen AI to sharpen their tactics, techniques and procedures.
• Gen AI will push up the potential aggregation, severity and frequency of claims in predictable areas by enhancing the capabilities of commercial hackers.

With the rapid development of Gen AI, less skilled hackers will see the biggest uplift to their capabilities. Many novice threat actors will gain access to tools, code and intelligence that will enable them to start hacking. And as expert hackers sell their capabilities online, AI will accelerate the democratisation of hacking.

Meanwhile, organised crime groups will increasingly focus on more lucrative hacking, and the most sophisticated hackers, backed by nation states, remain closely focused on conflict and geopolitical goals rather than making money.

Looking ahead, cyber security experts are positive on AI’s ability to reinforce defences. The practice of using AI to detect and defend against attacks is developing at pace.