Lloyd’s calculates a single cyber-attack on APAC ports could cost $110bn

A single cyber-attack that affects major ports across Asia-Pacific could cost $110 billion roughly equivalent to half of all losses from natural catastrophes globally in 2018. This is according to new research released today by Lloyd’s, the world’s re/insurance market.

These losses could occur in an extreme scenario in which a computer virus infects 15 ports across Japan, Malaysia, Singapore, South Korea and China, according to the report – Shen attack: Cyber risk in Asia Pacific ports – produced by the University of Cambridge Centre for Risk Studies, on behalf of the Cyber Risk Management (CyRiM) project, in partnership with Lloyd’s.

Despite the high costs to business and international trade, the report showed that the global economy is underprepared for such an attack, with 92 percent of the total economic costs uninsured, leaving an insurance gap of $101bn.

An attack via a computer virus carried by ships could scramble the cargo database records at major ports and lead to severe disruption, according to the scenario depicted in the report. In this scenario, the virus only directly affects ports in Asia-Pacific, but economic losses would be felt around the world due to the global interconnectivity of the maritime supply chain.

The report estimated that transportation, aviation and aerospace sectors would be the most affected ($28.2bn of economic losses in total), followed by manufacturing ($23.6bn) and retail ($18.5bn).

John Neal, Lloyd’s CEO, said: “We know that the biggest assets for companies are not physical; they are intangible. This is confirmed by Lloyd’s latest research, which shows that a single severe cyber-attack on Asia’s biggest ports could cause roughly the same economic loss as half of all the natural disasters in the world in 2018.

“With the increasing application of technology and automation, these risks will become even more acute. High levels of underinsurance in Asia, which is also home to nine out of ten of the world’s busiest ports, means that these exposures must be urgently addressed.

“This new research provides new insights on this fast-moving threat to support the creation of new products, services and mitigation strategies, and in doing so make businesses and communities more resilient.”

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

Premiums surge at RenaissanceRe in casualty and specialty
AXIS Capital combined ratio soars to 109.4% on cat losses

China and India have biggest non-life insurance potential: Mapfre

Apollo Syndicate Management appoints Vinay Mistry as chief risk officer

Verisk sees strong growth in insurance business

LV= appoints appointed Jon Mansley as sales and marketing director

Feature:  10 ways insurers are using insurtech to drive new business