Titled "Generative AI: Transforming the Cyber Landscape," the report emphasises the complexity and critical nature of cyber risks, which are among the foremost threats to national security and corporate operations. The report points out that the advent of advanced, unrestricted GenAI models will fundamentally alter the cyber risk landscape by enhancing the capabilities of both cyber attackers and defenders.

The role of cyber insurance is crucial in aiding businesses and society at large in comprehending and managing this dynamic threat. It's vital for businesses and the insurance sector to proactively address the anticipated shifts in the threat environment.

Despite the sophisticated capabilities of GenAI technologies, including the use of Large Language Models (LLMs) in cybercrime, their impact on the cyber threat landscape has been limited, thanks to the industry's safety protocols, effective AI model governance, and the barriers related to costs and hardware that have deterred widespread exploitation by cybercriminals.

Nonetheless, as these technologies become more accessible, the risk they pose is expected to escalate, potentially enabling cybercriminals to deploy these tools for harmful purposes, thereby threatening individuals, property, and both tangible and intangible assets.

The influence of GenAI on the cyber domain is anticipated to enhance the frequency, severity, and variety of smaller-scale cyber attacks over the next 12 to 24 months. This trend is expected to stabilize as security and defensive technologies evolve to mitigate these impacts.

Dr Kirsten Mitchell-Wallace, Director of Portfolio Risk Management, Lloyd’s said: “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.

“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. Generative AI is not the first, and won’t be the last, disruptive technology to impact the cyber threat landscape, so it is critical that business improve their risk mitigation, security and defence technologies, as well as seek appropriate risk transfer today, more than ever before.”

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