Cyber threat equivalent to natural disaster
A report from Lloyd’s has warned that a widespread cyber-attack could be as damaging as a catastrophic natural disaster.
Counting the cost: Cyber exposure decoded predicted that a major attack could result in losses of more than £40.5bn.
Lloyds developed the report alongside cyber risk analytics firm Cyence. It revealed that a malicious hack that takes down a cloud service provider could generate losses of $53bn, while attacks on computer operating systems run by a large number of businesses around the world which could cause losses of $28.7bn.
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.’