Major cyber attack could cost the world US$3.5 trillion, warns Lloyd's of London
A MAJOR cyber attack on a financial services payments system could lead to global losses of US$3.5 trillion, with much of it not covered by insurance, commercial insurance market Lloyd’s of London said on Wednesday (Oct 18).
The United States would suffer losses of US$1.1 trillion over a five-year period from such an attack, which would cause widespread disruption to global business, according to a systemic risk scenario developed by Lloyd’s and the Cambridge Centre for Risk Studies.
China would face US$470 billion in losses and Japan US$200 billion over the same period, Lloyd’s said.
“The global interconnectedness of cyber means it is too substantial a risk for one sector to face alone and therefore we must continue to share knowledge, expertise and innovative ideas across government, industry and the insurance market to ensure we build society’s resilience against the potential scale of this risk,” Lloyd’s chairman Bruce Carnegie-Brown said.
Cyber insurance saw over US$9 billion in gross written premiums in 2022 and is forecast to grow to US$13 billion to US$25 billion by 2025, Lloyd’s said.
Concern about the cost of such insurance and whether it will provide cover in the case of war are deterring some potential customers, brokers say.
More than 20 per cent of the world’s cyber premium is placed in the Lloyd’s market, Lloyd’s said.
Major cyber insurers Beazley and Hiscox are among more than 50 insurance companies in the Lloyd’s market. REUTERS
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