Lloyd's: How Gen AI is Reshaping the Cyber Threat Landscape

The sudden emergence of generative AI (Gen AI) is working to reshape the cyber threat landscape, according to a new report conducted by Lloyd’s.

Lloyd’s has issued a report on how the rapid evolution of Gen AI technology will impact the cyber risk landscape, suggesting that businesses will need greater resilience strategies to counter cybersecurity threats.

It has been estimated by McKinsey & Company that Gen AI could add US$2.6tn to US$4.4tn to the global economy annually by 2030. Whilst plenty of organisations are keen to harness the technology, some industry leaders and governments have cited concerns about how quickly the technology is growing and if it should be regulated.

Evolving to combat changing threats

The report by Lloyd’s, Generative AI: Transforming the cyber landscape, focuses on cyber as one of the most complex and critical risks threatening national security and businesses today. This is due to the dynamics of the risk landscape already posing many challenges.

Whilst Gen AI holds power to unlock real business value within the digital transformation landscape, it must be handled responsibly. Lloyd’s states that the emergence of AI, particularly unrestricted advanced Gen AI models, could reshape the cyber landscape as it augments both threat actor and defensive capabilities. 

As a result, the company cites cyber insurance as a key solution to help businesses and wider society understand and manage ever-evolving threats.

Cyber insurance policies help organisations pay for any financial losses incurred in the wake of a cyberattack or data breach. It also helps them cover costs that include investigations, crisis communication, legal services or customer refunds.

Lloyd’s also highlights that it is important for businesses such as the insurance industry to take proactive steps to manage potential changes to the threat landscape. It states that, with the industry having stringent safety mechanisms and existing model governance, widespread misuse of AI has so far been limited.

However, given how advanced Gen AI and large language models (LLMs) are, they can be used by cyber criminals to incite harm or damage.

Balancing AI innovation with risk

As AI tools become more accessible, they pose increased risks and create greater opportunities for threat actors to use the technology in malicious ways, leading to harm or damage for people, property and assets.

The implications for businesses can be huge. A 2023 survey conducted by Veritas even found that one in 10 business executives fear their business will not survive the next 12 months, as a result of increased AI use in cybersecurity.

Last year saw cyberattacks like ransomware hitting record levels, leading to increased corporate anxieties over how safe their data actually is. 

Lloyd’s argues in its report that the impact of Gen AI on the cyber landscape will increase the frequency and severity of smaller scale cyberattacks, which will only continue to grow in the near future. It states that security and defensive technologies will need to be more robust to combat negative impacts.

With this in mind, Lloyd’s continues to work with governments, regulators, security experts and insurers to understand and underwrite AI-associated risks associated with AI, partnering with industry, engaging policy makers and supporting sustainable innovation.

“Lloyd’s has been exploring the complex and varied risks associated with AI since 2016 and its developments present both opportunities and risks for businesses and the insurance industry,” says Dr Kirsten Mitchell-Wallace, Director of Portfolio Risk Management at Lloyd’s.

“When considering the threat landscape, we must stay responsive to these rapidly changing technologies, learn from them, and seek to make the most of the efficiencies they bring. Gen AI is not the first, and won’t be the last, disruptive technology to impact the cyber threat landscape, so it is critical that businesses improve their risk mitigation, security and defence technologies, as well as seek appropriate risk transfer today, more than ever before.”

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