Major cyber attack could trigger losses of £40.5bn, says Lloyd's

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"For example, while average losses in the cloud service disruption scenario are $53 billion for an extreme event, they could be as high as $121.4 billion or as low as $15.6 billion, depending on factors such as the different organizations involved and how long the cloud-service disruption lasts for", the report reads.

The NotPetya virus which attacked ports, law firms and factories cost $850 million.

Lloyd's estimated that the uninsured gap could be as high as $45bn for the cloud services scenario and $26bn for the vulnerability scenario, with the vast majority of economic losses not covered by insurance.

A major global cyber attack could cost the worldwide economy £40 billion, with the damage being akin to a catastrophic natural disaster, according to a report by Lloyd's of London.

It is estimated that a major hack of cloud service providers and global business systems would significantly dwarf the extensive damage caused by the WannaCry attack, which resulted in a cost of roughly £6 billion globally.

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The insurance market has formed a partnership with Cyence, a firm specialising in analysing the economic impact of cyber risks, to urge companies and its own underwriting members to focus more on their potential losses.

"Because cyber is virtual, it is such a hard task to understand how it will accumulate in a big event", Lloyd's of London chief executive Inga Beale told Reuters. A lack of historical data on which insurers can base assumptions is a key challenge.

In June, a global wave of cyberattacks that began in Russian Federation and Ukraine and spread to western Europe and across the Atlantic wrought havoc on government and corporate computer systems.

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. The malware would take a year to spread among systems of the provider's customers, including financial services companies and hotels, causing them to lose a massive amount of money.

Lloyd's has a 20 percent to 25 percent share of the $2.5 billion cyber insurance market, Beale said in June. On average, the economic loss for such a cyberattack is predicted to be around $53 billion. More worryingly, the report states that as much as $45 billion of that sum may not be covered by cyber policies due to companies not investing enough in appropriate insurance policies.

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