Lloyd’s estimates global cyber attack could cost $121.4 billion
Lloyd’s of London has estimated that an extreme global cyber attack could result in damages of as much as $121.4 billion. That’s comparable to the economic hit caused by extreme weather events like Hurricane Katrina in 2005.
Lloyd’s new report says that the average losses from an attack on “a widely used cloud service provider” that caused it to “fail” would be $53 billion, depending on the particular organisations involved and the length of time for which it would be out of action. In that eventuality, insurers could be hit with claims that ranged from $620 million to $8.1 billion.
Lloyd’s report is the latest sign that the world is waking up to the severity of the risk posed by cyber attacks. This year, two massive hacks have caused numerous governmental agencies and private businesses to go under. These attacks, WannaCry in May and Petya in June, have made it very clear just how exposed some of our most precious data systems are.
Insurers are eager to get in on the game: according to Lloyd’s, the cyber-insurance market is worth between $3 billion and $3.5 billion today. Reinsurer Much Re. claims that could rise to between $8.5 billion and $10 billion by 2020.
Another scenario detailed in Lloyd’s report is reminiscent of the WannaCry attack from May: where “widely used software was exploited by hackers.” Due to running an old version of Microsoft Office with obsolete protection, Britain’s National Health Service was bought to a grinding halt by the attack, highlighting the very real human threat these crimes have. Lloyd’s suggests that attacks like this could do up to $28.7 billion damage in a worst-case scenario.
Dominion holds a number of companies involved in cyber-security in its Global Trends Managed Fund.
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