The understanding Insurance companies have of cyber liability is under developed compared to other insurance types which could lead to insurance companies underestimating the potential loss a cyberattack could cause on a customer.
The average loss from a serious cyberattack that causes a cloud service disruption could cost the global economy as much as $53 billion and could even be as high as $121.4 billion, depending on the organizations involved and how long the disruption lasts, according to the Lloyd’s Class of Business teams “Counting the costs Cyber exposure decoded” report.
The report also said the insurance industry is underestimating the the potential loss resulting from a cloud security attack by $4 billion, for a large loss, and $45 billion, for extreme loss, in terms of the cloud services scenario.
The study is designed to provide realistic and plausible scenarios to help quantify cyber-risk aggregation for risk managers whose businesses are exposed to either a hack that takes down their cloud-service provider or an attack that causes the failure of a particular operating system across their own company, customers, suppliers and/or business partners.
To combat these threats researchers recommend risk managers gain a better understanding of the affects cyber-attacks might have on their core business processes, and plan what actions they could take to mitigate these risks