Beazley’s executive team has outlined their perspectives on significant challenges and opportunities facing businesses in 2025, focusing on artificial intelligence (AI), climate resilience, regulatory divergence, and technology obsolescence.
Adrian Cox (pictured above), CEO of Beazley, discussed the continued prominence of AI in business strategies. Beazley’s research indicates that 80% of companies plan to integrate AI into their operations.
Cox warned of the risks associated with “AI-washing,” where businesses overstate AI’s impact or implementation without substantiating its use.
“We will only be able to definitively say we are in an ‘AI bubble’ when it bursts, but with any new, exciting technology, hype can quickly outpace reality,” said Cox. He noted that regulatory bodies, such as the U.S. Securities and Exchange Commission, have already penalized firms like Delphia and Global Predictions for AI misrepresentation.
Cox emphasized the importance of a measured approach to AI adoption, ensuring cyber risks and operational basics are not overlooked in the pursuit of innovation.
Paul Bantick, chief underwriting officer, highlighted the growing impact of climate change on businesses, noting a “significant gap between perceived and actual preparedness for climate-driven extreme weather events.”
Bantick pointed to events such as Hurricane Milton and record-breaking flooding in Europe as evidence of the increasing severity of natural catastrophes. Beazley’s research revealed that 70% of global businesses acknowledge the operational impact of extreme weather, yet many have insufficient resilience measures.
“Businesses must leap from reactive to proactive resilience planning to adapt to the threatening realities of climate change,” Bantick said.
He underscored the insurance industry’s role in promoting resilience through risk management and rate adequacy while highlighting the reputational risks for companies lagging in climate action.
Bethany Greenwood, group head of specialty risks, addressed the challenges posed by diverging regulatory landscapes as global markets shift heading into 2025.
Greenwood noted that newly elected governments are likely to introduce varying approaches to regulation, increasing the complexity for multinational businesses.
“Balancing difference by market has always required careful attention, but this challenge will now be more complex than ever,” Greenwood said. Beazley’s research shows that concern over regulatory risks among business leaders has risen from 18% to 24% in the past three years, and this trend is expected to continue.
Greenwood highlighted the potential for directors’ and officers’ liability in navigating conflicting compliance requirements, creating what she described as a “damned if you do, damned if you don’t” environment.
Bob Wice, head of underwriting management for cyber and tech, focused on the risks associated with technology obsolescence. High-profile incidents in 2024, including a ransomware attack on Change Healthcare, underscored the vulnerabilities tied to outdated systems and single points of failure.
“Many companies are still using legacy systems because they still work, but this lack of basic risk management is causing more and more problems,” said Wice. Beazley’s research found that 27% of business leaders are concerned about tech obsolescence risks, with this figure expected to rise in 2025.
Wice also pointed to increasing regulatory scrutiny on end-of-life software and devices, particularly in sectors like healthcare. He urged businesses to develop plans to address risks tied to legacy systems and the rapid pace of innovation.
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