Lloyds of London have today published a report in conjunction with the risk modelling experts Cyence that estimates the potential exposures of a global cyber attack and likens the potential cost of such an attack to the cost of Superstorm Sandy speculating that the global economic cost of such an attack could be $53 billion dollars.
According to Cyence, the potential costs of a global event could dwarf the $8 billion economic cost of the “Wanna Cry” ransomware attack in May.
With little historical data and a a continuously evolving threat, the report highlights the difficulties for insurers in predicting the potential losses and exposures in this fast emerging market but emphasises the need for providers of cyber risk and cyber liability insurance to continue to develop cyber risk insurance products to meet the needs of business in managing the economic cost of such attacks.
The scenario produced by Lloyds-Cyence is based upon a hypothetical attack on a cloud service that infects the cloud service’s source code and inserts a malicious code into the users system that is designed to trigger a year later. The year used in the model allows sufficient time for the malware to spread throughout the internal network and externally to clients of the owners of the infected machines.
The report looks at the economic costs of such an attack based on the interruption to business, the costs of rectification and the cost of third party actions and legal costs,
The report which is available for download here provides a detailed overview of both future and past threats along with information regarding the current scope of available insurance coverage for cyber risks.
In spite of the recent publicity surrounding cyber attacks and the voracity of such attacks the level of cyber insurance protection bought by businesses in the UK is surprisingly low.
If you require any further information about cyber attack risks or the insurance products that can address the potential risks to your business you can contact us directly on 0161 300 2931.
Trevor Maynard Head of Innovation at Lloyds introduces the report