Lloyd's of London is warning a significant cyber attack could cause more damage to the global economy more than a major natural disaster.
In an extreme event of cloud service disruption, Lloyd's of London warned economic losses could be as high as $121.4bn (£92.5bn) depending on factors such as the different organisations involved and how long the cyber attack lasts for.
The warning is contained in a report published today (17 July), titled Counting the cost: Cyber exposure decoded, by Trevor Maynard, head of innovation at Lloyd's and George Ng, a founder and chief technology officer at Cyence.
The authors said: "Cyber risk is a growing global threat. While digitisation is revolutionising business models and transforming daily lives, it is also making the global economy more vulnerable to cyber-attacks."
As a result, the economic and insurance consequences of cyber crime are increasing.
In 2016, cyber attacks were estimated to cost businesses as much as $450bn (£344bn) a year globally
The report forecasts that losses could range from $4.6bn (£3.5bn) for a large event to $53.1bn (£40.6bn) for an extreme event if a cloud service was disrupted through hacking.
Economic losses could even be as high as $121.4bn (£92.5bn) depending on factors such as the different organisations involved and how long the cloud service disruption lasts for.
Cyber attacks have the potential to trigger billions of dollars of insured losses.
For example, if a cloud service were hacked, insured losses could range from $620m (£474m) for a large loss to $8.1bn (£6.2bn) for an extreme loss.
For a mass software vulnerability scenario, the insured losses range from $762m (£583m) for a large loss to $2.1bn (£1.6bn) for an extreme loss.
The longer software is out in the market, the more time malicious actors have to find and exploit vulnerabilities and the report warned many individuals and companies run obsolete software that has more secure alternatives.
New software is typically built on top of prior software code. This makes software testing and correction very difficult and resource intensive, the report concluded.