U.S. Execs Show Overconfidence in Cyber Preparedness Despite Rising Threat Awareness: Survey

U.S. business executives increasingly recognize cyber threats as their top business risk, yet at the same time they are overestimating their preparedness to address these dangers, according to Beazley’s latest Risk & Resilience report focusing on tech transformation and cyber risk.
For the first time since 2022, concern over cyber risk has climbed among U.S. business leaders, the survey found. The percentage of U.S. executives citing cyber risk as their greatest threat jumped to 31% this year from 22% in 2024, marking the highest level of concern in three years.
This heightened awareness reflects an expanding spectrum of cyber threats facing businesses today, according to Beazley. The threat landscape now includes cyber warfare, where nation states deploy attacks to disrupt operations and destabilize economies, alongside traditional concerns like ransomware. AI has supercharged ransomware capabilities, increasing both speed and impact of attacks.
“AI is being exploited to automate, enhance and scale up cyber attacks, lowering the barriers to entry,” noted Alessandro Lezzi, group head of cyber for Beazley. “Firms appear to have a false sense of security about cyber resilience, which requires constant vigilance, rapid vulnerability patching, and active business continuity planning,” he added.
Third-party cyber risks have emerged as organizations become increasingly interconnected, creating new vulnerabilities through supplier and partner ecosystems. Hacktivism is also on the rise, with activists infiltrating systems to disrupt operations and damage reputations, particularly threatening firms caught in ideological divides, according to the report.
Despite growing recognition by business leaders of AI’s disruptive potential—with 79% of surveyed executives agreeing AI will positively impact their business economic prospects this year—other technology concerns are diminishing. Worries over tech obsolescence dropped from 27% in 2024 to 21% this year, while concern about intellectual property, data privacy risks and new regulations is also falling.
Disconnect Between Awareness and Preparedness
A paradox emerges from the survey data, Beazley found: as cyber risk awareness increases, so does executive confidence in their company’s defensive capabilities. The percentage of U.S. executives who believe they are prepared to counter cyber threats rose to 81% this year from 73% in 2024, creating what the report characterizes as a false sense of security.
This overconfidence appears misplaced, the report noted, given the constantly evolving nature of cyber threats. Many organizations still lack the sustained vigilance required for genuine preparedness, even as they express confidence in their current defensive posture, according to Beazley.
The disconnect becomes particularly concerning when considering that cyber threats now encompass sophisticated nation-state actors, AI-enhanced attacks and complex third-party vulnerabilities that require comprehensive, continuously updated defense strategies.
Investment Surge Reflects Growing Recognition of Gaps
Despite expressed confidence in their preparedness, executive actions reveal recognition of significant cybersecurity gaps. An overwhelming 82% of U.S. firms are looking to improve their cyber security through third-party suppliers this year, while 42% plan direct investments in enhanced cyber security capabilities.
This substantial investment appetite suggests that beneath the surface confidence, business leaders understand their current defenses may be inadequate for the evolving threat landscape, according to Beazley.
“The current cyber and technology threat landscape is increasingly dynamic and unpredictable,” said Melissa Carmichael, head of U.S. cyber at Beazley. “Risks continue to emerge in unexpected places and businesses can’t be complacent when it comes to their resiliency, so this investment is crucial.”
The planned investments come as 71% of executives believe AI will replace jobs in their companies over the next 18 months, indicating significant technological transformation that will require corresponding security adaptations, according to the survey.
View the full report here. &