According to commercial insurance market Lloyd’s of London, a significant cyberattack on a financial sector payments system may result in losses of $3.5 trillion globally, most of which would not be covered by insurance.

A systemic risk scenario created by Lloyd’s and the Cambridge Centre for Risk Studies indicated that such an attack would cause significant disruption to global commerce and cost the United States $1.1 trillion over a five-year period.

According to Lloyd’s, China would lose $470 billion and Japan $200 billion during that time.

“The global interconnectedness of cyber means it is too substantial a risk for one sector to face alone and therefore we must continue to share knowledge, expertise and innovative ideas across government, industry and the insurance market to ensure we build society’s resilience against the potential scale of this risk,” Lloyd’s chairman Bruce Carnegie-Brown said.

According to Lloyd’s, gross written premiums for cyber insurance exceeded $9 billion in 2022 and are expected to reach $13 billion to $25 billion by 2025.

Brokers claim that some prospective clients are being turned off by worries about the expense of this kind of insurance and if it will cover them in the event of a war.

According to Lloyd’s, the market for cyber premium accounts for more than 20% of global cyber premium.

Among the more than fifty insurance firms in the Lloyd’s market are significant cyber insurers Beazley and Hiscox.

(Adapted from Reuters.com)

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