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Global cyber attack could trigger losses equivalent to those of Superstorm Sandy
Written by staff reporter
A major global cyber attack has the potential to trigger US$53 billion of economic losses, roughly the equivalent to a catastrophic natural disaster like 2012’s Superstorm Sandy, according to a scenario described in new research by Lloyd’s and cyber risk analytics modelling firm Cyence.
The report reveals the potential economic impact of two scenarios: a malicious hack that takes down a cloud service provider with estimated losses of US$53 billion, and attacks on computer operating systems run by a large number of businesses around the world which could cause losses of US$28.7 billion. By comparison, Superstorm Sandy, the second costliest tropical cyclone on record, is generally considered to have caused economic losses between US$50 billion and US$70 billion.
The findings also reveal that, while demand for cyber insurance is increasing, the majority of these losses are not currently insured, leaving an insurance gap of tens of billions of dollars.
“This report gives a real sense of the scale of damage a cyber attack could cause the global economy,” said CEO of Lloyd’s, Inga Beale. “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."