Lloyds Warns A Payments System Hack Could Trigger A $3.5 Trillion Global Loss
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Lloyd’s has released a systemic risk scenario on the impact that a cyberattack on a leading financial services payments system would have on the global economy. The report noted that such an attack would not only cause widespread disruption to global business but also result in economic losses of $3.5 trillion.
Lloyds is a globally acclaimed marketplace for insurance and reinsurance services. In its latest report, it said that cyberattacks continued to pose a threat to businesses and governments.
The growing risk of cyberattacks poses a danger to all areas of society. The issue is complex and also has far-reaching effects. It is capable of causing disruptions to supply chains and geopolitics.
Global Economy Could Lose $3.5T In Cyberattack
Lloyd’s report also analyzed the countries that would experience the highest five-year economic loss because of cyberattacks. The United States would suffer an estimated loss of $1.1 trillion, while China would lose $470 billion. Japan could also potentially lose $200 billion.
The time that economies and countries would take to recover from such attacks depends upon the structure of the economy, resilience, and exposure levels.
Given the massive danger that cybersecurity poses, the cyber insurance market has grown significantly. Last year, it was estimated to be worth more than $9 billion in Gross Written Premiums. It is predicted to reach between $13 billion and $25 billion by 2025.
Growing Need For Cyber Insurance
The amount going towards cybersecurity represents only a small amount of the potential economic losses faced by businesses and society. According to Lloyd’s, the report demonstrated the importance of insurance in supporting and protecting customers and businesses against cyber threats.
Lloyd’s Chairman, Bruce Carnegie-Brown, opined that “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.”
More than a fifth of the global cyber premium is in Lloyd’s market. The company is now planning to boost the growth of this industry thoughtfully and sustainably. It will also support innovation for new products and services.
In September, the Lloyd Futureset held the first Cyber Innovation Forum. The forum connected customers with representatives across different industries such as government, insurance, and technology.
