Report by Lloyd’s of London and the Cambridge Centre for Risk Studies at Cambridge Judge Business School examines implications of cyber attack on the US power grid.
A report by Lloyd’s of London and the Cambridge Centre for Risk Studies at Cambridge Judge Business School, called “Business blackout,” finds the potential for enormous losses in the event of hackers shutting down parts of the US power grid.
The report examines the insurance implications of such an attack through a scenario in which 93 million people are left without power, plunging 15 states and Washington, DC, into darkness and disrupting water supplies due to failing electric pumps.
The report finds that the impact to the US economy from such a scenario could rise to more than $1 trillion in the most extreme version of the scenario, which is divided into various degrees of severity.
Dr Andrew Coburn, Director of the Advisory Board of the Cambridge Centre for Risk Studies, said:
Using a detailed technical analysis of how a cyber attack could be carried out and what it would do, we can set out a realistic stress test for portfolio management. This enables insurers to assess their potential losses across all business lines, not just specific cyber risk covers.