How artificial intelligence and automation are changing cyber and liability risks
By- Amit Solanki, Executive President and Head of Liability and Special Risks, Howden India
Artificial intelligence and automation now touch almost every aspect of business life. From customer service to hiring, lending, and day-to-day operations, these technologies keep the engines running behind the scenes. They deliver speed and efficiency, yes, but at the same time, they’re redrawing the risk landscape at a pace few businesses expected. Risk management has become a lot more intense and unpredictable.
For years, companies could look to historical data and a regular schedule of check-ins to spot threats. Those days are gone. Now, risks can shift by the hour. Surging technologies, tight new regulations, and massive quantities of sensitive data mean companies can’t just tick boxes and call it a day. The environment moves quickly. So must the people watching over it.
Changes in Cyber and Liability Risks
Cyber risk captures this speed better than anything. It’s no longer just the IT department’s responsibility. Cyberattacks evolve rapidly, with AI helping bad actors launch targeted campaigns and exploit vulnerabilities faster than ever. Phishing attempts, ransomware, and widespread breaches don’t just pop up more often, they strike without warning, giving companies little time to react.
Liability risk is another issue. Automated systems now make many daily decisions about customers and employees, and there’s real fallout when algorithms go wrong or let bias slip in unnoticed.
Data privacy adds to the challenge. Under the Digital Personal Data Protection (DPDP) Act, companies can face penalties between ₹10 crore and ₹250 crore if they do not comply. This means data protection is not only a legal requirement but also an important business risk.
How Risk Management Is Changing
In response, businesses are overhauling their risk management strategies. Many now keep real-time watch over potential threats, check in more often, and weave different types of risk, cyber, liability, compliance, privacy, into interconnected frameworks. A problem in one area can spark trouble in another. Companies also run regular crisis simulations to uncover blind spots and fine-tune their responses.
Third-party risk is another big concern. So many companies rely on outside vendors, especially for IT and data. If a partner slips up, those vulnerabilities become your own. That’s why firms are scrutinizing their vendors more closely and tightening their risk review processes.
The old models of risk management aren’t built for this speed or complexity. They assume problems unfold slowly, with clear impacts. These days, a single breach can throw operations into chaos, invite regulatory penalties, spark lawsuits, and wreck reputations, all at once.
The Way Forward
Insurance has changed to keep pace. It’s no longer just about payouts after disaster strikes. Today, policies offer services like legal guidance, forensic investigation, or even pre-incident support to reinforce a company’s risk posture before things go wrong.
Yet in India, plenty of businesses, especially MSMEs, remain underinsured and exposed. As risks grow and shift, so does the need for robust risk strategies. Companies that tighten their governance, harness data intelligently, and make sure their response plans work under pressure will weather uncertainty far better than those standing still.