A new model from Lloyd’s puts the economic impact of a hypothetical but plausible cyber attack on a major financial services payments system at more than $3.5-trillion. The research explores nine hypothetical but plausible systemic risk scenarios and allows users, through an interactive tool, to show the potential economic impact of each scenario across 107 countries at three levels of severity.
They say the three countries that experience the highest five-year economic losses from the scenario are the United States at $1.1-trillion, followed by $470-billion in losses for China and $200-billion in losses for Japan. “The recovery time for individual countries or regions depends on the structure of their economy, exposure levels and resilience,” they write.
Lloyd’s says cyber insurance, a growing market, is estimated to be at just over $9-billion in gross written premiums last year. They add that more than one-fifth of the world’s cyber premiums are placed in the Lloyd’s market. Premiums are forecast to rise, hitting between $13-billiona and $25-billion by 2025. “However, this still represents a small portion of the potential economic losses that businesses and society face.”
The research, produced in partnership with the Cambridge Centre for Risk Studies, estimates that economic losses could reach up to $16-trillion in the most extreme scenario modelled.