Major Cyber-Attack Could Cost World Economy $121.4bn

Major Cyber-Attack Could Cost World Economy $121.4bn

Major Cyber-Attack Could Cost World Economy $121.4bn

For the cloud service disruption scenario in the report, average economic losses range from $4.6 billion from a large event to $53 billion for an extreme event.

The report likened the cost of a major cyberattack to Hurricane Sandy, the second most costly storm in history, which caused damage of between $50 billion and $70 billion to the northeastern United States five years ago.

The uninsured gap could be as much as Dollars 45 billion for the cloud services scenario - meaning that less than a fifth (17%) of the economic losses are actually covered by insurance.

In the event of a massive cyberattack, the global economy could suffer a huge loss of $121 billion, which would be on par with costs incurred by devastating natural disasters such as hurricanes Katrina and Sandy, renowned insurance market Lloyd's of London said in a report on Monday.

The report estimated the hit on the economy from such an event could land between $15 billion (£11 billion) and $121 billion (£93 billion) - a wide range that the authors blamed on a lack of historical precedence and quantifiable data, leaving the insurers with a challenge as they tried to accurately forecast the potential fallout of a widespread cyber attack.

According to Lloyds and Cyence, average economic losses from a major attack on cloud services could be about $53 billion. These costs mostly go on business interruptions and computer repairs.

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Lloyd's chief executive Inga Beale said underwriters needed to consider cyber cover and ensure premiums kept pace with the reality of the threat to technology systems.

In June, an attack of a virus dubbed "NotPetya" spread from infections in Ukraine to businesses around the globe. Meanwhile the "NotPetya" malware is said to have caused $850 million in economic damages, according to Cyence.

Among those identified are a malicious hack taking down a cloud service provider - this could cost anything between $15billion and $121billion.

As the cyber threat grows so the demand for cyber insurance increases.

However, the majority of these losses are not insured, which could result in an uninsured gap of as much as $45 billion for the cloud services scenario and $26 billion for the OS hacking scenario.

Lloyds has about one-quarter of the emerging area of cyber insurance and says risks are more hard to model than natural disasters due to the human element, which means underlying assumptions can change quickly.

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