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Most UK businesses are rapidly embracing Artificial Intelligence (AI), with 95% already using or looking into it, despite an increase in cyberthreats, with 80% of businesses in the country believing cyber risks are on the rise and over half (53%) having experience a cyber attack in the past year, QBE’s latest Control Risks Report has revealed.
UK businesses are adopting AI to leverage new efficiencies and reduce costs; however, this adoption introduces evolving cyber risks, highlighting the need for improved awareness regarding their management, analysts warn.
QBE’s latest Control Risks Report forecasts that by the end of 2025, the number of significant UK cyber incidents will increase by 50%.
The outlook on technology is optimistic, with 87% of respondents believing that AI will positively impact their business and 86% anticipating a boost to the wider UK economy within two years.
Already, 71% of UK businesses are actively using AI, with an additional 24% in the exploration phase.
However, this is shadowed by a parallel rise in cyber risk; 85% of businesses feel cyber attacks have increased in the UK during the past 12 months and more than half (53%) have experienced at least one incident themselves in the same period.
According to the report, 26% of businesses experienced a cyber attack that disrupted their activities for a working day or longer. Among these, 56% said that some or all of these were related to a supplier.
This data demonstrates how third-party platforms, including AI services, can widen the threat landscape. Moreover, 53% of businesses have personally endured at least one incident during the same period.
Alarmingly, 16% of businesses have experienced a cyber attack that disrupted their operations for a working day or longer.
The UK boasts Europe’s largest AI economy, valued at £72.3 billion, and ranks third globally behind the United States and China. While AI offers substantial economic advantages, it is simultaneously being exploited by cybercriminals to execute fraud and extortion against businesses of all sizes.
QBE’s report also found that Europe and North America witnessed nearly 50% growth in successful, significant, and disruptive cyber incidents between 2023 and 2024.
These disruptive attacks are predicted to rise by approximately 20% to 233 by ~20% to 233 by the end of 2025.
Last year, deepfakes were used in nearly 10% of all successful cyber incidents, with losses ranging from USD 250,000 to over USD 20m.
David Warr, QBE Insurance Portfolio Manager for Cyber, said: “Businesses are increasingly interconnected, and even the strongest internal cybersecurity measures can fall short if vulnerabilities exist within their supply chains. It’s essential for organisations to assess and secure their entire IT ecosystem, including third-party partners.”
He continued: “Artificial Intelligence presents both challenges and opportunities in cybersecurity. As AI tools become more accessible, cybercriminals are able to execute faster, more widespread attacks. This heightened threat environment requires vigilance and ongoing training. At the same time, when effectively managed, AI can enhance cyber defences by identifying weaknesses and enabling quicker responses.
“Organisations of all sizes, in the UK and globally, must strengthen their cyber resilience—both to prevent threats and to ensure they can respond swiftly and effectively if an attack occurs. You can have the best systems in the world, but these will be vulnerable unless you have regular staff training.”
QBE advises businesses to regularly assess their cyber risk profile when implementing AI software, prioritising the identification of critical data assets and technologies.
This should be complemented by continuous improvements to monitoring and overall network resilience. As well as providing ongoing cybersecurity training for employees, and establishing an incident response plan, ensuring that the business counts with adequate cyber insurance.
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