Aon has released its 2024 Intangible versus Tangible Risks Comparison Report, which emphasises the need for businesses across Europe, the Middle East, and Africa (EMEA) to reassess their cyber insurance and intellectual property (IP) protection strategies in the light of evolving threats from generative artificial intelligence (Gen AI), and the increasing exposure to losses of IP and intangible assets.
Key findings from the report reveal:
- The likelihood of a loss is higher for intangible assets than for tangible assets.
- The average Probable Maximum Loss for intangible assets is almost 43 percent higher than of tangible assets.
- Insurance is in place to cover only 17 percent of information assets compared to 60 percent for property, plant, and equipment (PP&E).
- 54 percent of businesses had a material or significantly disruptive security threat or data breach one or more times in the past 24 months.
- 69 percent of businesses use or plan to use AI products or services.
The new report drew insights from 596 respondents in EMEA, with the responses underscoring a key discrepancy in insurance coverage. While 60 percent of PP&E is insured, only 17 percent of information assets have similar protection. This gap has remained unchanged over the past two years, despite the increasing value of intangible assets and the growing frequency of substantial cyber breaches.
The survey also shows that the expected loss from a cyber event targeting intangible assets is 43 percent higher than for tangible assets. Furthermore, the likelihood of a significant cyber event involving intangible assets is three times greater than for PP&E. Despite these findings, many businesses still lack adequate coverage for trade secret theft and intellectual property liability – potentially exposing them to heightened financial risks.
With 69 percent of businesses in EMEA using or intending to integrate AI products or services, the potential for cyber incidents and regulatory compliance issues, is considerable. New regulations like the European Union’s (EU) AI Act could add further complexity by inadvertently prompting more litigation from copyright holders.
Additionally, the rising threat from Gen AI is expected to increase the amount and heighten the impact of cyber-attacks over the next two years. Gen AI may enhance the existing tactics, techniques, and procedures (TTPs) of cyber criminals, as well as make it easier for novice cyber criminals to carry out effective attacks, contributing to an increased global ransomware threat.