Major Ransomware Attack Could Hit U.S. with $89B In Economic Damages
Bill Sinn | January 29, 2019
An international ransomware attack could cost the U.S. $89 billion, accounting for nearly half of the $193 billion global price tag for an attack, according to a new report from the Cyber Risk Management (CyRiM) project, of which Lloyd’s of London is a founding member.
The cyber-attack – which launches through an infected email, encrypts data on every device connected to the network, and has the potential to spread quickly around the world – causes damages at 600,000 companies, ranging from premier institutions to small businesses.
The catastrophic losses in the U.S. result from a combination of reduced productivity and consumption, IT clean-up costs, ransom payments and supply chain disruption.
The new report, ‘Bashe attack: Global infection by contagious malware’, shows that across the U.S. an attack would cause economic damage to a wide range of business sectors. Globally, retail and healthcare are the most affected ($25 billion each) and in the U.S. the financial sector also tops the list.
“According to Lloyd’s City Risk Index, a cyber-attack is the second greatest threat to the U.S. economy – in large part due to the increasing impact of attacks as the U.S. and global economies become more dependent on and driven by technology.” Hank Watkins, Regional Director and President, Americas at Lloyd’s, said. “While awareness of the threat posed by cyber-attack and the global insurance industry’s response have been growing in the U.S., it’s more important than ever for companies, individuals and organizations to anticipate and prepare for breaches. While not a new form of cyber-attack, WannaCry, NotPetya and subsequent events have demonstrated the potentially devastating impact of ransomware.”
The report shows that companies are underprepared for such an attack, with 86 percent of the total economic costs uninsured.
Additionally, Dr. Trevor Maynard, Head of Innovation at Lloyd’s, said, “This report shows the increasing risk to businesses from cyber-attacks as the global economy becomes more interconnected and reliant on technology. Companies must ensure they are better prepared for ransomware attacks, and that includes working with insurers to reduce the risks before they are attacked and ensure they have the right insurance cover in place to respond after the event. The reality for business is it’s not a question of if you get attacked, but when.”
Note: The report analyses the costs of the scenario using three levels of severity. The numbers in this announcement are based on the most severe version of the scenario.
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