Ride the Lightning

Lloyds Says a Cloud Cyber Attack Could Cost $121 Billion

August 8, 2017

As if we didn't have enough to worry about. eSecurity Planet covered a report from insurer Lloyd's warning that a major global cyber-attack could cause $53 billion in economic losses, roughly equivalent to the economic damage from 2012's Superstorm Sandy. This represents an average loss.

The cloud service disruption could cause losses as high as $121.4 billion or as low as $15.6 billion, according to Lloyd's, depending on the duration of the disruption and the organizations involved – while the average insured losses range from $620 million for a large loss to $8.1 billion for an extreme loss.

Similarly, a global attack on operating systems could cause losses between $9.7 billion and $28.7 billion – with the average insured losses ranging from $762 million to $2.1 billion.

Lloyd's CEO Inga Beale said in a statement that the report is intended to provide a clear sense of the scale of damage a cyber-attack could cause the global economy "Underwriters need to consider cyber cover in this way and ensure that premium calculations keep pace with the cyber threat reality," Beale added. "We have provided these scenarios to help insurers gain a better understanding of their cyber risk exposures so they can improve their portfolio exposure management and risk pricing, set appropriate limits and expand into this fast-growing, innovative insurance class with confidence."

Last fall, NetDiligence's sixth annual Cyber Claims Study found that the average total breach cost in 2016 was $665,000, with an average insurance payout for crisis services (forensics, notification, credit/ID monitoring and legal counsel) of $357,000. For large companies, the average claim was just under $6 million.

According to Lloyd's, the current cyber insurance market is worth between $3 billion and $3.5 billion — and it could reach $7.5 billion by 2020. That's a lot in rubles. Now why did rubles come to mind?

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