Arts&Culture

Major Cyber-Attack Could Cost World Economy $121.4bn

Major Cyber-Attack Could Cost World Economy $121.4bn

A major global cyber-attack has the potential to trigger up to $53 billion of economic losses, according to a scenario described in new research by Lloyd's, the world's specialist insurance market, and Cyence, a leading cyber risk analytics modelling firm.

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After a "cloud" attack, the second most likely threat stemmed from attacks on computer operating systems of the type run by a large number of businesses around the world, known as a "mass software vulnerability scenario", which could cause losses of up to $28.7 billion.

In the hypothetical cloud service attack in the Lloyd's-Cyence scenario, hackers inserted malicious code into a cloud provider's software that was created to trigger system crashes among users a year later. Actual losses are predicted to be as high as $121 billion.

In comparison, the official cost of Hurricane Katrina in 2005 was $108bn, although unofficial estimates put the cost as high as $250bn. The first, the WannaCry ransomware, is estimated to have cost around $8 billion in more than 100 countries.

An initial £21m of capital funding will be targeted at strengthening the cyber resilience of major trauma sites as an immediate priority, and improving NHS Digital's national monitoring and response capabilities.

Gujarat High Court dismisses Essar Steel petition
Essar Steel owed lenders around Rs45,000 crore, of which Rs31,671 crore had become non-performing as of 31 March 2016. Each of these 12 accounts that have failed to repay loan to banks have an outstanding debt of Rs 5,000 crore.

As reported by The Guardian, Lloyds Chief Executive Inga Beale said: "This report gives a real sense of the scale of damage a cyber-attack could cause the global economy".

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", she added.

The company, which published the 56-page report in cooperation with computer security firm Cyence, said its findings also reflect how hard it is to model and understand an area in which there is so little historical data upon which to base assumptions.

As highlighted by the Lloyd's and Cyence report, the potential economic and insured loss from a cyber event is huge and appears to be growing, and cyber scenarios such as this could help market players to better understand the potential impacts and costs of large and extreme cyber attacks.

In another scenario, exploiting a chink in a company's software could lead to $26 billion of losses not covered by insurance, Lloyd's believes.


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