Artificial intelligence (AI) technology and deep fakes are becoming the latest surge behind phishing scams, as they are creating new opportunities for criminals.
A combination of voices and writing styles are being mimicked to look as if calls, messages and emails are coming through from a familiar source, therefore making it easier for people to get scammed.
In a new report from AM Best, the rating agency has highlighted how AI is also now mimicking fingerprints and even moving into mimicking DNA.
These threats will only put further pressure on security systems and require that insurers be more “vigilant about underwriting and pricing.”
Moreover, as cyber insurance is consistently evolving, Ransomware, the predominant cause of loss in 2021, has returned in a more advanced form, with double extortions—one extortion payment for the system and another extortion payment for the data.
However, there has been some effort made to make ransom payments illegal. Both North Carolina and Florida have banned local governments and state entities from paying ransom, which could also result in business interruption losses while the ransom goes unpaid.
Best states that even with the decline in ransomware claims during 2022, first-party claims however, remain close to 75% of all claims, because business e-mail compromise (BEC) claims increased.
At the same time, there is also no guarantee that what appears to a recent rise in ransomware in early 2023 will lead to a decrease within other types of cybercrimes.
Elsewhere, with the bulk of claims particularly being first-party claims, the number of third-part liability claims still remains significant. The balance between first-party and third-party claims has been consistent the past three years, so any shift in either direction will add to difficulties in projecting ultimate losses, which will impact both reserving of ultimate losses and pricing of policies.
