Economic losses from a major cyber outage could be as large as damages caused by major hurricanes, according to a research report published by Lloyd's today.
The report is designed for risk managers whose businesses are exposed to the types of cyber-attacks described in the report's two scenarios: a hack that takes down their cloud-service provider or an attack that causes the failure of a particular operating system across their own company, customers, suppliers and/or business partners.
In an extreme event of cloud service disruption, Lloyd's of London warned economic losses could be as high as $121.4bn (£92.5bn) depending on factors such as the different organisations involved and how long the cyber attack lasts for.
The report forecasts that losses could range from $4.6bn (£3.5bn) for a large event to $53.1bn (£40.6bn) for an extreme event if a cloud service was disrupted through hacking.
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.
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The latest report comes two months after the WannaCry ransomware attack, which hit NHS hospitals before spreading to almost 100 countries.
The WannaCry fiasco, which infected a large number of computer systems in over 100 countries recorded a loss of around $8 billion, according to Cyence. A lack of historical data on which insurers can base assumptions is a key challenge.
"NotPetya" caused $850 million in economic costs, Cyence said. The financial and reputational cost in terms of business interruption and remediation can be substantial.
The report's hypothetical cloud service provider attack involves hackers injecting malicious code created to trigger system crashes among victim systems a year later. However, owing to the inherent uncertainty and complexity surrounding cyber risk and the potential for cyber aggregation, actual economic losses in an extreme event could be as high as $121.4 billion, or as low as $15.6 billion. "Just like some of the worst natural catastrophes, cyberevents can cause a severe impact on businesses and economies, trigger multiple claims and dramatically increase insurers' claims costs", Lloyd's chief executive Inga Beale said.
Lloyds, the world's oldest insurance market, said its projections, issued on Monday, indicate the growing risk posed by the economic system's dependence on Internet-connected computer systems.