Monday, July 17, 2017

Risk: Lloyd's Quantifies Cyber Attack Potential Costs

As of last Friday Maersk was still noting some lingering negative effects from the June 27 Petya cyber attack. This stuff gets nasty even without the doomsday stuff - electrical grid shutdown, etc.

From City AM, July 17:

Think Superstorm Sandy was bad? A major global cyber attack could cost $53bn, warns Lloyd's of London
A major cyber attack could cost the global economy $53bn (£40bn), City stalwart Lloyd’s of London has warned.

The economic cost is roughly equivalent to the impact of Superstorm Sandy in 2012, the second costliest cyclone on record.

Lloyd’s ran two scenarios in a report released today: a malicious hack that brings down a cloud service provider and an attack on a computer operating system used by a large number of businesses around the world.

Estimated losses from the two scenarios total $53.0bn and $28.7bn respectively. This compares with the economic losses of Sandy that amount to between $50bn and $70bn.

Lloyd’s chief executive Inga Beale said the report gave a “real sense of the scale of damage a cyber-attack could cause the global economy”.
She added:
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.
Gap The report, produced in conjunction with risk analytics modelling firm Cyence, also highlighted an “uninsured gap” of $45bn of losses – in other words losses which are not covered by cyber insurance policies. This means less than a fifth (17 per cent) of costs could be recouped from insurers.
Furthermore, $26bn of losses could be underinsured in the report’s scenarios....MORE
Also at City AM:
Cyber attacks leave firms facing higher bill than they expected