skip to navigation skip to content

Lloyd’s Business Blackout Scenario

This report is a joint publication by Lloyd’s and the Centre for Risk Studies, considering the insurance implications of a cyber attack on the US power grid. 


Surveys suggest that cyber is an under-insured risk: many more organisations believe that their existing insurance would respond in the event of cyber attack than is likely to be the case. Understanding the impact of severe events is one of the key requirements for insurers to develop cyber risk cover, and this study aims to contribute to that knowledge base. 

The scenario described in the report reveals three attributes of cyber risk that are particularly significant for the development of insurance solutions. These factors may individually be found in a variety of risks, but cyber risk combines them in ways that demand innovative responses by insurers. 

This report reveals a complex set of challenges, but the combination of insurers’ expertise in pricing risks together with the capabilities of the cyber security sector to assess threats and vulnerabilities, and the risk modelling expertise of the research community, has the potential to offer a new generation of cyber insurance solutions for the digital age. 

Key findings

  • Responding to the challenges posed by cyber threats will require innovation by insurers. The pace of innovation will likely be linked to the rate at which some of the uncertainties revealed in this report can be reduced. 
  • Cyber attack represents a peril that could trigger losses across multiple sectors of the economy. 
  • A key requirement for an insurance response to cyber risks will be to enhance the quality of data available and to continue the development of probabilistic modelling. 
  • The sharing of cyber attack data is a complex issue, but it should be an important element for enabling the insurance solutions required for this key emerging risk.