Global cyber-attack could trigger $53bn loss; report
The research reveals the potential economic impact of two scenarios in a cyber-attack crisis
This year a wave of global cyber-attacks have surfaced, causing havoc on organisations and whilst disruption is clear, the financial impact has the potential to trigger up to $53bn of economic losses.
Lloyd's, a specialist insurance market, and Cyence, a cyber risk analytics modelling firm, researched the potential outcome by analysing two scenarios. The first, a malicious hack that takes down a cloud service provider could see estimated losses up to $53bn. The second, attacks on computer operating systems run by large businesses around the world, causing losses of $28.7bn.
The findings also see that whilst the demand for cyber insurance is increasing, the majority of losses are not currently insured.
The uninsured gap could be as much as $45bn for the cloud services scenario, meaning that 17% of the economic losses are actually covered by insurance. The underinsurance gap could be as high as $26bn for the mass vulnerability scenario, meaning that just 7% of economic losses are covered.
Inga Beale, CEO of Lloyd's, said: "This report gives a real sense of the scale of damage a cyber-attack could cause the global economy. Just like some of the worst natural catastrophes, cyber events can cause a severe impact on businesses and economies, trigger multiple claims and dramatically increase insurers' claims costs. Underwriters need to consider cyber cover in this way and ensure that premium calculations keep pace with the cyber threat reality.
"We have provided these scenarios to help insurers gain a better understanding of their cyber risk exposures so they can improve their portfolio exposure management and risk pricing, set appropriate limits and expand into this fast-growing, innovative insurance class with confidence."