Stress test for risk management reveals cyber-attacks costly

Tuesday 29 January 2019 00:13 CET | News

A hypothetical scenario developed as a stress test for risk management has showed that a potential global cyber-attack could cause USD 85 billion - USD 193 billion worth of damage.

The report, jointly produced by insurance market Lloyd’s of London and Aon, reveals that Insurance claims after such an attack would range from business interruption and cyber extortion to incident response costs and that total claims paid by the insurance sector in this scenario is estimated to be between USD 10 billion and USD 27 billion, based on policy limits ranging from USD 500,000 to USD 200 million.

The striking difference between insured and economic loss estimates highlights the extent of underinsurance, in case of such an attack, the stress test showed. An attack could affect several sectors globally, with the largest losses in retail, healthcare, manufacturing and banking fields, according to Reuters.

Moreover, regional economies that are service dominated, especially the US and Europe, would suffer more and are vulnerable to higher direct losses, the report said.

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Keywords: risk management, fraud prevention, insurance, cyber attacks, financial loss, Lloyds of London, study, Aon
Countries: World

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