Cyber attacks could cost $120bn globally, are you safe?

Similar to disastrous natural calamities like earthquakes and hurricanes Katrina and Sandy, Lloyd’s of London has cautioned that a grave cyber hacking may cost the global economy more than  $120bn (£92bn).

A 56-page statement from the world’s earliest insurance market issued two months after a ransomware cyber-attack that limped NHS hospitals and, knocked nearly 100 countries, states the threat by such global crimes has spiralled and gives a huge hazard to firms and governments over the next ten years.

According to Lloyd’s, a scenario that is likely to happen is a cyber attack that hacks down a cloud service system with an estimated loss of $53bn – but this is just an average estimate. Nevertheless, the ambiguity around estimating cyber losses, it said the numbers could be higher than $120bn, and the lowest could be sitting at $15bn.

In comparison to the damage dealt by Hurrican Katrina, it cost the world an estimated $108bn, which includes $80bn of insured losses. Meanwhile, Hurricane Sandy in 2012 is calculated to have caused economic losses of around $50bn to $70bn.

Inga Beale, chief executive 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.

“Underwriters need to consider cyber cover in this way and ensure that premium calculations keep pace with the cyber-threat reality,” she said.

Trevor Maynard, Lloyd’s chief of innovation and co-author of the paper with the cyber security firm Cyence, said the global cyber attack in May “showed us that these sorts of attacks are absolutely possible”.

The sectors that are the riskiest state are the Financial services, followed by software and technology, the hospitality industry, and then followed by retail and health care services. Nevertheless, no one is exempted from being hacked. Finance.co.uk’s tip is not giving out any personal information like your name, date of birth, pins, passwords, and the like, through websites, emails, text messages, and calls you receive.

A new type of insurance has emerged in the last few years, called Cyber cover, to support and preserve your business if it encounters a data breach or is the subject of an assault by a malicious hacker that concerns its computer systems.

Maynard said, “From year to year, risk varies relatively little but climate change, in the end, will be far larger as a risk,” he said. “It affects the global economic structure, food, water. [It’s like] trying to turn a supertanker around – we can’t start in 30 years when things are going bad, we have to start now.”