Cyence and Lloyd’s Issue Joint Report Underscoring Growing Scope of Cyber Risk for Insurers
By a
The report concludes that cyber losses have grown in severity to the point of rivaling major hurricanes in their total potential damages. In each scenario modeled, total losses reached into the tens of billions for extreme return periods.
Bad actors cause cloud service outages: In the first scenario, a group of "hacktivists" set out to disrupt cloud service providers' infrastructure to draw attention to the environmental impacts of cloud-based businesses. The group inserts a malicious modification to an infrastructure's code that can be exploited to trigger system-wide failures, leading to widespread service and business interruption. Across all industries,
Human error causes zero-day to fall into the wrong hands: In the second scenario, a hard copy of a zero-day vulnerability report affecting all versions of an operating system used by 45 percent of the global market makes its way into the hands of a malicious actor by human error. This report is purchased on the dark web by criminal parties who develop system exploits and attack vulnerable businesses for financial gain.
Today, Lloyd's estimates the global cyber market is worth between
"This report's findings suggest economic losses from cyber events have the potential to be as large as those caused by major hurricanes. Insurers could benefit from thinking about cyber cover in these terms and making explicit allowances for aggregated cyber-related catastrophes. To achieve this, data collection and quality is important, especially as cyber risks are constantly changing," 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," said
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