Lloyd’s, the world’s leading marketplace for insurance and reinsurance, today published a systemic risk scenario that models the global economic impact of a hypothetical but plausible cyber attack on a major financial services payments system, resulting in widespread disruption to global business and potential global economic losses of $3.5trn.
The three countries that experience the highest 5-year economic loss from the scenario are the United States $1.1trn, followed by China $470bn and Japan $200bn. The recovery time for individual countries or regions depends on the structure of their economy, exposure levels and resilience.
Cyber attacks continue to threaten businesses and governments, with year-on-year costs around maintenance, prevention, and response to attacks increasing. Cyber remains a risk that has the potential to affect all areas of society, as it is both a complex and connected risk impacting areas such as supply chains and geopolitics.
Cyber insurance is a growing market, estimated at just over $9bn in Gross Written Premiums last year, and forecast to hit between $13bn and $25bn by 2025. However this still represents a small portion of the potential economic losses that businesses and society face.