KUALA LUMPUR, Aug 27 — Cyber insurers have spent years defining what constitutes a hack and when coverage should pay out, but the rapid emergence of artificial intelligence (AI) agents is raising new questions, forcing insurers to review their policies.
Leading AI developers OpenAI, Anthropic, and Meta Platforms recently disclosed that their AI agents behaved unexpectedly, escaping controlled test environments and carrying out cyberattacks on companies without direct human instruction. While those incidents did not cause reported damage, they highlighted the rapidly evolving cyber risks facing companies and insurers.
After receiving an initial instruction, autonomous AI systems can make independent decisions. According to eight executives at major companies and analysts, insurers, including MSIG, QBE, and Beazley, are reviewing traditional cyber policies and adapting their language to account for emerging risks as such systems take on more autonomous tasks.
Companies are grappling with issues including whether autonomous AI systems fit traditional policy definitions of a cyber attacker and who bears liability for AI-generated actions that cause a loss.
In its latest report, Munich Re estimated that the global cyber insurance market was worth nearly US$15 billion (RM60.49) last year and is expected to reach roughly US$28 billion (RM112.9) by 2030. Earlier this year, Aon said that nearly 20 per cent of cyberattacks will involve generative AI by 2027, according to its forecasts.
"As AI becomes capable of identifying vulnerabilities and carrying out attacks autonomously, carriers will need to continually review policy language," said property and casualty speciality insurer MSIG USA's North America head of cyber Ryan Kratz.
Defining AI-driven losses
Several companies, including Armilla AI, Munich Re's AiSure, and AXA XL, provide targeted coverage against AI-specific risks such as model underperformance, hallucinations — when AI generates false or misleading outputs — and intellectual property infringements.
But traditional cyber policies are designed to be broader, covering losses stemming from a range of incidents, such as ransomware payments, business interruption, system recovery, forensic investigations and legal costs. Business interruption is commonly the largest component of a claim.
Most policies envisage a specific security event that causes the loss, such as an employee stealing company data through unauthorised access or a server attack that takes a system down. However, AI agents can cause losses without triggering a traditional security event, particularly when they are using access to systems they were deliberately given.
"Some losses caused by AI agents will absolutely fall within cyber policies. The harder cases are where there is no conventional attacker and potentially no unauthorised credential use," said Armilla AI's chief executive officer cum founder Karthik Ramakrishnan.
For example, a company could give an AI agent access to its network to fix security vulnerabilities. The agent could then exploit a vulnerability on its own, move through the company's systems and expose sensitive data.
That could result in a loss, with no conventional hacker and potentially no unauthorised access at the outset.
With relatively little historical claims data on AI-driven losses, and the AI industry still trying to understand the capabilities of autonomous models, such risks are hard to price.
"They are still discovering what the potential is for them, how they work and what kinds of security controls they need to put in place to contain them," said RAND's senior policy researcher Sasha Romanosky, whose organisation focuses on cybersecurity and insurance, among other areas.
Ringfencing AI risks
For the most part, insurers are clarifying how existing policy language applies when AI is involved, rather than adding exclusions.
"Underwriters recognise that it is important to continue to offer a product that responds to these types of events," said insurance broker Marsh's global cyber product leader Greg Eskins.
For example, insurer QBE has been enhancing protection for specific emerging AI exposures. Its global head of cyber Serene Davis said that if an AI-related event leads to a conventional cyber incident, resulting losses continue to fall within a cyber policy.
"AI is treated as a risk amplifier, not a fundamentally new cyber risk," she said in a statement.
A spokesman for the United Kingdom's Beazley said companies want AI risks included in broad cyber policies.
"As new AI risk emerges, we are developing new coverage," the spokesman said.
Still, some executives said targeted exclusions are being discussed in some pockets of the industry. Verisk Underwriting Solutions' speciality commercial lines vice president Jenny Soubra said that one area of focus relates to potential systemic events, where a single AI model or platform could contribute to losses across many organisations at once.
Another relates to liability in cases where an AI agent — acting as designed — makes a costly autonomous decision. Some insurers may classify this as a non-cyber event.
"The market is still evolving, but we expect organisations and insurers to continue exploring ways to address AI-related exposures as adoption accelerates," she said.
