Insurers: Major cyberattack on cloud provider could cost more than huge hurricane
A successful major hacking attack on a global cloud provider could easily end up costing more than a huge natural disaster like Superstorm Sandy, and it could cripple the nascent cyber-insurance market even though only a fraction of the losses would be covered, a new report says. The report, which underlines the high volatility and low risk visibility that cyber-insurers face, was co-produced by venerable insurance market-maker Lloyd’s of London and Silicon Valley risk-management company Cyence. Its authors acknowledge it is hard to estimate losses from future large cyber-events with any degree of exactitude. “The understanding of cyber liability and risk exposures is relatively underdeveloped compared with other insurance classes,” they write. “Traditional insurance risk modeling relies on authoritative information sources such as national or industry data, but there are no equivalent sources for cyber-risk.” As a result, there is a very wide range of possible cost totals, depending on how the impact cascades through the economy. […]
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