Cyber-attack could surpass Hurricane Katrina losses, claims insurer
Research claims that an attack on a cloud provider could cost more in losses than Hurricane Katrina
A cyber-attack on a cloud service provider could cause up to $120bn (£92bn) in losses, rivalling the damage caused by a major natural disaster, a report has found.
Research from insurer Lloyds of London, conducted in conjunction with risk-modelling firm Cyence, found that a worst-case scenario could surpass the damage caused by the highest profile natural disasters, with Hurricane Katrina estimated to have cost $108bn.
With $120bn losses seen as the worse-case scenario, the report predicts the average cost of an attack on a cloud services provider to be $4.6bn for a large event and $53.1bn for an extreme event.
A vulnerability in software that is exposed globally could cause losses of $28.7bn in an extreme case, the report found.
In contrast the Wannacry attack in May caused around $8bn in damages, according to Cyence.
Inga Beale, CEO of Lloyd's, 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."
Cyber insurance
The report highlighted the vast gap between the losses that could be caused by a cyber-attack and the amount that is currently insured.
An extreme event causing $53.1bn in losses, for example, would see around $8.14bn of insured losses - meaning around 17 per cent of losses would be covered.
Marc Goodman, advisor to Cyence and global cyber risk strategist, said: "To date, no computer has been created that could not be hacked—a sobering fact given our radical dependence on these machines for everything from our nation's power grid to air traffic control to financial services.
"Economic losses are growing exponentially and all companies need a strategy to mitigate cyber risk in today's world."