A cyberattack temporarily taking down one of the three top U.S. cloud service providers — Amazon Web Services (AWS), Microsoft Azure or Google Cloud Platform) could trigger up to $19 billion in business losses, the risk assessment firm Lloyd’s of London said in a new report.
As if that weren’t bad enough, almost all of that fallout wouldn’t be insured. And the damage would extend to all the customers and partners running workloads in the victimized cloud.
The Lloyd’s report, entitled Cloud Down: Impacts on the U.S. Economy, compiled jointly with risk modeler AIR Worldwide, digs into the potential losses to some 12.4 billion U.S. businesses that depend on the cloud and simultaneously present an established market for cyber insurance companies.
It further examines the potential business losses from enterprises that rely on the cloud should cyber hacking along with other incidents such as lightning strikes, bombings and human errors fully disrupt cloud service to customers, Reuters reported.
Specifically, one incident taking down a cloud service provider for three to six days could result in losses ranging from $5.3 billion to $19 billion, the company said (via Reuters). Only $1.1 billion to $3.5 billion of those losses would be insured, according to the Lloyd’s report.
Smaller cloud service providers would suffer less financial damage. For example, a cyber incident that knocks out one of the 10th- to 15th-largest U.S. cloud providers for a similar period of time could prompt losses of $300 million and $1.5 billion, with a corresponding hit of $40 million and $300 million to cyber insurers, the report said. Lloyd’s did not identify the 15 cloud service providers it examined in the document, as Reuters reported.
As a point of reference, last July Lloyd’s estimated that a single global cyber attack could deliver a $53 billion economic blow. Actual losses could be as high as $121 billion, depending on the type of organizations involved and the length of the disruption. Losses for cyber insurers could range from $620 million to $8.1 billion.
Obviously, as the cloud services market grows, so does the risk to businesses and insurers trying to calculate their potential exposure to cyber hacking and other disasters. With more businesses considering signing on for cyber insurance as the potential for attacks rises, market sizing data is an important factor. Researcher Gartner recently pegged worldwide revenue from public cloud services at slightly more than $260 billion in 2017, up nearly 19 percent from 2016. Growth is coming from spikes in software, platform and infrastructure services, Gartner said. By 2020, the segment is expected to balloon to more than $411 billion.
Lloyd’s CEO Inga Beale told Reuters that the “world is much more correlated,” and “other things can impact and aggregate with a cyber security issue.”