Menu
If hackers shut down AWS, Microsoft or Google, business losses could hit $19B

If hackers shut down AWS, Microsoft or Google, business losses could hit $19B

And only a fraction of which would be insured

A cyber problem that temporary shuts down a top U.S. cloud computing provider could trigger as much as US$19 billion in business losses, only a fraction of which would be insured, Lloyd's of London said in a report.

The report, co-written with modelling firm AIR Worldwide, examined potential losses stemming from disruptions to business that depend on cloud computing in the event that cyber incidents such as hacking, lightning strikes, bombing of data centres and human errors "completely disrupt" U.S. cloud service to all of a provider's customers.

An incident that takes one of the top-three cloud service providers offline for three to six days would result in total losses of between US$5.3 billion and US$19 billion.

Insured losses would total between US$1.1 billion and US$3.5 billion, according to the Lloyd's-AIR report.

Cloud computing has grown rapidly in recent years as businesses move their operations to public clouds, the big computer data centres that are displacing traditional customer-owned computer systems.

The Lloyd's report, based on scenarios involving the top 15 U.S. cloud providers, does not identify those providers. A spokeswoman for Lloyd's, the world’s largest specialty insurance market, declined comment.

Research firm Canalys estimates the cloud computing market at US$14.4 billion for the third quarter of 2017, up 43 per cent from a year prior.

Amazon.com Inc holds 31.8 per cent of the market, followed by Microsoft Corp at 13.9 per cent and Alphabet Inc's Google with six per cent, according to Canalys' estimates.

"I think the world is much more correlated," than it was before, Lloyd’s of London CEO Inga Beale said in an interview. "Other things can impact and aggregate with a cyber security issue."

A cloud failure can disrupt orders for web-based businesses, shipping, email, payments and more.

Insurers are struggling to estimate their potential exposure to cyber-related losses amid mounting cyber risks and interest in cyber insurance.

"As the cyber insurance market grows rapidly, the distribution of risk will have to be monitored carefully," Lloyd's said in the report.

A cyber incident that knocks out one of the 10th- to 15th-largest U.S. cloud providers for three to six days would cause US$300 million and US$1.5 billion in losses and between US$40 million and US$300 million in losses to the insurance industry.

Smaller companies may rely more on the cloud than larger companies and are less likely to have cyber insurance, according to the report.

(Reporting by Suzanne Barlyn in New York; Additional reporting by Salvador Rodriguez in San Francisco; Editing by Bernadette Baum)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags CloudsecurityMicrosoftGoogleData Centreamazonmicrosoft azureAmazon Web Servicespublic cloudGoogle Cloudcyber

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments