Cyber attacks could be as costly as major natural disasters, report warns
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A report analysing the potential damage of different types of cyber attack has concluded that these events are likely to cost governments and businesses tens of billions of dollars, even matching the scale of Hurricane Sandy for certain types of attacks.
The report was compiled by Lloyd’s of London, the world’s oldest insurance market, in association with Cyence, a risk modelling consultancy. The threat posed by cyber attacks has increased considerably, the report says, and the global economy will became more vulnerable to these attacks over the next decade.
Perhaps the greatest threat is that of hacker targeting a cloud service provider; this could cause average losses of $53bn (£41bn), rising up to $121bn (£93bn) for large-scale cloud service disruptions to sensitive organisations.
This is similar to the cost of damage caused by Hurricane Sandy in 2012; after striking the northeast US, it caused $50-70bn in economic damage across 24 states. Sandy was the second most expensive ever to strike the US.
The global economic cost of the WannaCry ransomware attack in May 2017 has been estimated at $8bn (£6.1bn), and that of the NotPetya attack which spread from Russia and Ukraine in June 2017 at $850m (£650m), according to Cyence. These attacks encrypted users’ data on networks of machines, disrupting operations.
Other costs can include that of technical repairs after attacks.
The most likely serious attack, following a cloud attack, would involve a mass software vulnerability scenario: this could affect the operating systems run by businesses all around the world, causing losses of up to $29bn (£22bn).
Most losses from cyber attacks are not currently insured, Lloyd’s and Cyence reported; due to the lack of historical precedent, insurers are finding it challenging to analyse the potential costs of cyber attacks. This lack of coverage leaves organisations highly vulnerable to attacks.
“Because cyber is virtual, it is such a difficult task to understand how it will accumulate in a big event,” said Inga Beale, chief executive of Lloyd’s.