Intangible versus tangible risks comparison
Source: Middle East Insurance Review | Jun 2024
New research aims to provide a better understanding of the evolving threats of generative AI, cyber and IP and also provides a focus on the role insurance can play in protecting intangible assets to help organisations make better decisions regarding allocation of their finite resources to protect against tangible and intangible perils.
The 74-page study, ‘2024 Intangible versus Tangible Risks Comparison Report’ published in May 2024, was sponsored by Aon and conducted independently by the Ponemon Institute. The report is based on insights from 2,462 small, medium and large organisations across a broad range of industries throughout the world.
Potential losses related to intangible asset values from evolving perils such as Gen AI, cyber security, and intellectual property misappropriation are already significant. As the world moves ahead through a highly complex multi-decade AI transformation – where the upside rewards and downside perils are uncertain – the velocity of these risks is set to increase.
Despite this, a significant protection gap persists for intangible assets, with only 19% insured according to the research. Tangible assets, despite their lower relative value, are insured to a level three times greater, at 60%.
Major findings from the report show:
- The likelihood of a loss is higher for intangible assets than for tangible assets.
- The average total value of intangible assets is nearly 14% higher than that of tangible assets.
- The average probable maximum loss for intangible assets is almost 37% higher than that of tangible assets.
- 67% of organisations use or intend to use AI products or services.
- 56% of organisations had a material or significantly disruptive security exploit or data breach one or more times in the past 24 months. M