A state-sponsored cyber attack could cause economic damage on a scale equal to Covid-19, overwhelming the insurance industry and requiring the Government to step in to cover the losses, the chairman of Lloyd’s of London has warned.
Bruce Carnegie-Brown said it would be a good idea for any government-backed programme to address future pandemic risk to include a mechanism to deal with rare but catastrophic events such as a large cyber attack. He said: “The cyber insurance market is relatively new. It’s fast-growing, but it’s quite small. Most businesses, and indeed individuals, are not protected for cyber risk in the UK.
“You could easily see that having a similar impact [to Covid-19] on the UK economy … if very significant parts of the economy were taken down by some kind of a cyber intervention.”
A devastating cyber attack in 2017 caused havoc in the NHS and cost £92m to fix. Insurance bosses have already formed a steering committee to propose a scheme backed by government to cover the costs of future pandemics beyond what their firms can afford.
Stephen Catlin, its chairman, said he hoped to hammer out the outline of a structure within three months. Six working groups involving 90 people will begin detailed planning this week. Mr Carnegie-Brown said it would take longer to devise a system covering extra risks such as cyber attacks, meaning insurers may opt to deal with pandemics on a stand-alone basis first.