Cybercriminals are already ahead of the game with AI and are targeting firms with ever-increasing sophistication.
A growing number of Irish businesses are sounding the alarm over the cybersecurity risks posed by artificial intelligence, according to the newly released Hiscox Cyber Readiness Report 2025.
The report, now in its ninth year, surveyed 500 Irish companies and found that 62% view vulnerabilities from third-party AI tools as a major emerging threat over the next five years.
“Cyber resilience is no longer optional – it’s business critical”
The findings highlight a shifting cyber landscape, where traditional threats like ransomware persist, but new risks linked to AI adoption are rapidly gaining prominence. Over the past 12 months, 40% of Irish businesses experienced at least one cyberattack, with 36% of those involving distributed denial of service (DDoS) incidents that disrupted operations.
The financial and reputational toll of these attacks is significant. Nearly one-third of respondents said a cyber incident had a material impact on their company’s financial health, while 28% reported difficulty attracting new customers as a result.
Ransomware remains a particularly costly challenge. Among those targeted, 70% paid a ransom to prevent the publication of sensitive data. Yet the outcomes were often disappointing: 35% still had to rebuild systems despite receiving a recovery key, and 29% saw their data leaked regardless of payment.
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Stephen Donaldson, Head of Underwriting at Hiscox Ireland, said the findings underscore the evolving nature of cyber threats.
“Cyber criminals are evolving just as fast as businesses adopt new technologies like AI,” Donaldson said. “While most companies recognise AI’s potential to boost productivity, there’s real concern about the vulnerabilities it brings, especially through third-party tools.”
Despite the risks, 66% of Irish businesses still view AI as more of an asset than a liability. Many are taking proactive steps to mitigate AI-related threats: 42% plan to bring some AI hardware and software development in-house, while 38% are ensuring their cyber insurance policies explicitly cover AI risks.
Encouragingly, 56% of businesses believe their cyber resilience has improved over the past year, and one in four expects to significantly expand cybersecurity and data protection investments in the year ahead.
“Cyber resilience is no longer optional – it’s business critical,” Donaldson added. “From protecting solvency to safeguarding customer trust, companies that invest early and continuously in cyber security will be the ones best placed to weather the next wave of threats.”
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