Cyber insurers have spent years defining what constitutes a hack and when coverage should pay out, but the rapid emergence of 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 dir
ect 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. Insurers, including MSIG, QBE and Beazley are reviewing traditional cyber policies and adapting their language to account for e
merging risks posed by such systems taking on more autonomous tasks, according to eight executives at major companies, and analysts.
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, analysts and experts said.
The global cyber insurance market was worth nearly $15 billion last year and is expected to reach roughly $28 billion by 2030, Munich Re estimated in its latest report. Aon said earlier this year that nearly 20% 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 Ryan Kratz, head of cyber, North America, at property and casualty specialty insurer MSIG USA.
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 unauthorized access by an employee who steals company data or a server attack that takes a system down. AI agents, however, can cause losses without trigg
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ering 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,” Karthik Ramakrishnan, CEO and founder of Armilla AI, told Reuters. “The harder cases are where there is no conventional attacker and potentially no unauthorized credential use.”
A company, for example, 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 unauthorized access at the outset.
