Report: Global Economy Could Lose $3.5 Trillion in Systemic Cyberattack
Insurance giant Lloyd’s of London has published a systemic risk scenario of a cyber-attack resulting in global economic losses of $3.5trn.
The scenario involves “a hypothetical but plausible” cyber-attack on a major financial services payment system, leading to widespread disruption to global businesses.
Working with the Cambridge Centre for Risk Studies, the research explored nine hypothetical systemic risk scenarios. The potential economic impact of these scenarios across 107 counties was calculated with an interactive data tool, using GDP as its central measure.
The researchers presented global economic losses across three levels of severity – major, severe and extreme. The damage ranged from $2.2trn in the lowest severity scenario to $16trn in the most extreme scenario, over a five-year period. The weighted average across the three severities modeled was $3.5trn.
The three countries that would experience the highest five-year economic loss from the scenario are the US ($1.1trn), China ($470bn) and Japan ($200bn), according to the analysis. The research noted that the recovery time for individual regions depends on the structure of their economy, exposure levels and resilience.
Llyod’s said the findings highlight the complex and connected risk posed by cyber, impacting areas such as supply chains and geopolitics.
Lloyd’s chairman Bruce Carnegie-Brown commented: “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.”
In January 2023, the World Economic Forum (WEF) warned that geopolitical instability means a cyber “catastrophe” is imminent.