Lloyd's of London warns cyber attack could cost £92.5bn

Angelica Greene
July 17, 2017

However it said in the cloud service disruption scenario, because of the uncertainty around aggregating cyber losses, this figure could be as high as $121bn, or as low as $15bn.

Lloyd's of London has warned that a serious cyberattack could cost the global economy more than US$120 billion - as much as catastrophic natural disasters, such as Hurricanes Katrina and Sandy.

The company, which published the 56-page report in cooperation with computer security firm Cyence, said its findings also reflect how hard it is to model and understand an area in which there is so little historical data upon which to base assumptions.

The report, Counting the cost: Cyber exposure decoded, developed with cyber risk analytics firm Cyence, revealed the potential economic impact of two scenarios: a malicious hack that takes down a cloud service provider with estimated losses of $53 billion, and attacks on computer operating systems run by a large number of businesses around the world which could cause losses of $28.7 billion.

The latest report comes two months after the WannaCry ransomware attack, which hit NHS hospitals before spreading to almost 100 countries.

In this first scenario, average economic losses ranging between $ 4.6 billion for an important event and $ 53 billion for a major event. Reuters notes most companies lack information frameworks they can rely on to assess their clients' risk profiles and make base assumptions, a significant problem for an industry which thrives on data. NotPetya was significantly less costly - globally, it cost organizations US$850 million.

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Economic costs typically include business interruptions and computer repairs.

The report's hypothetical cloud service provider attack involves hackers injecting malicious code created to trigger system crashes among victim systems a year later.

By then, the malware would have spread among the provider's customers, from financial services companies to hotels, causing all to lose income and incur other expenses.

"This report's findings suggest economic losses from cyber events have the potential to be as large as those caused by major hurricanes", said Trevor Maynard, the head of innovation, at Lloyd's.

Inga Beale, Lloyd's chief executive, said: "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".

The authors said: "Cyber risk is a growing global threat".

Other reports by GizPress

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