Cyber threats cause most concern for businesses, with US executives feeling more prepared to handle this risk than their peers in the UK according to a new report from insurer Beazley.

The publication – Spotlight on Technology Risk – reveals that a range of technology risks feature prominently on executives’ risk radars on both sides of the Atlantic since the pandemic hit. The report looks at how the Covid-19 pandemic is the biggest catalyst of operational and strategic change in a generation, forcing businesses to adapt their technology infrastructure to new ways of operating. Not only has this led to greater threat of disruption by competitors, it has also opened the door to cyber criminals who have moved fast to exploit staff, processes and networks that were suddenly exposed beyond the corporate firewall.

Against this backdrop, the technology group of risks were ranked much higher than any other category of risk by the executives surveyed. 37% rank technology their top risk category with business risk coming second at 33%, followed by environmental risk (including pandemic) at 18%, and political and regulatory risk at 12%.

Paul Bantick, global head of cyber and technology at Beazley said: “Technology risk ranking as highly as it does even during a pandemic is very telling. Strong awareness of the risk is encouraging. However, technology is an area where the threat vector evolves constantly, and businesses need to continue updating risk management processes and work with partners that can support them in identifying and mitigating tech-based risk.

“In these uncertain times, customers want three things: a deep understanding of risk by sector and size, specialist risk advisory services as part of their policy and comprehensive, straightforward coverage. Making communication and collaboration between insurer, broker and customer more important than ever.”

The research found that cyber risks – including IT-based threats affecting national infrastructure through to individual customer data, data leak or employee error – are the highest ranked within the technology risk category. They are of particular concern in the US where 38% of leaders rank cyber risk top vs 29% in the UK. In the US, 55% of businesses feel very prepared to anticipate and respond to cyber risk compared with 34% in the UK.

Overall, the sectors which feel most exposed to cyber threats include energy and utilities, with 40% of businesses ranking this their top risk, followed by retail and technology media and telecoms, both with 38% of companies ranking this risk top.

Disruption risk – or the failure to innovate and keep pace with new developments, customer demand or market shifts – is ranked second in the technology category, with 30% of business leaders identifying it as their key risk. Disruption ranks this highly because UK respondents are particularly concerned by the threat that it poses, with 32% ranking it top compared with 28% in the US. In terms of the ability to anticipate and respond to disruption risk, well under half (41%) of businesses overall reported they felt well prepared.

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