As rapid technological change dances with global instability, South African insurers are facing a perfect storm of cyber risks; specifically AI cybercrime.
Artificial intelligence (AI) and geopolitical tensions are fueling a new wave of sophisticated cyber threats, forcing the insurance industry to adapt quickly.
Nikita Naicker, PI Tech & Cyber Underwriter at SHA Risk Specialists, warns that these are times of “unprecedented change and disruption” in the cyber risk landscape.
AI: Double-edged sword
While AI offers numerous benefits to businesses, it’s also becoming a powerful tool for cybercriminals.
Naicker explains that AI can be used to “better disguise attacks and manipulate victims into falling prey to social engineering attacks.”
This evolving threat landscape poses a significant challenge for insurers trying to assess and price risk accurately.
Moreover, as businesses increasingly rely on AI to streamline operations, they may be exposing themselves to new, poorly understood risks.
Naicker predicts that AI will have a “medium to high impact on the risk landscape in the near future.”
Geopolitical tensions amplify cyber risks
The global political climate is adding fuel to the cyber fire.
With over 60 countries holding presidential elections this year, cybercriminals with political motivations are seizing the opportunity to steal confidential information and execute cyber sabotage.
Ongoing conflicts in Europe and the Middle East are also contributing to the heightened risk environment.
Naicker notes that developments in countries like Russia, North Korea, and Iran can have ripple effects worldwide, particularly in developing nations like South Africa.
Evolving AI cybercrime tactics
Ransomware remains a significant threat, with attackers employing increasingly diverse extortion methods.
Business email compromise has also become a major concern, with cybercriminals using sophisticated social engineering techniques and AI to infiltrate corporate networks.
Large corporations with interconnected operations are particularly vulnerable to supply chain attacks, where threat actors exploit vulnerabilities in service providers or vendors to gain access to client networks.
The insurance industry responds
Despite the challenging environment, Naicker reports that the local specialist insurance market remains stable and competitive.
Insurers are adapting by:
- Expanding insurance products and removing ransomware sublimits
- Increasing uptake of cybercrime extensions within policies
- Embracing AI technology for better risk assessment and underwriting processes
- Focusing on educating clients about cyber risks and security measures
Looking ahead
As AI cybercrime continues to evolve, South African insurers are positioning themselves not just as risk transfer mechanisms, but as partners in cybersecurity education and risk management.
Naicker emphasizes that “selling cyber insurance is not our sole focus – we understand our important role in sharing knowledge and educating the market about cyber security.”
For South African businesses, the message is clear: in this high-risk digital landscape, investing in robust cybersecurity measures and comprehensive insurance coverage is more critical than ever.
