Effects of large-scale attacks can overwhelm the sector in covering losses

InfoMoney – sindsegsp

A cyberattack that disrupts daily life in the U.S. will likely cost more than the insurance industry can afford and is likely to require government intervention, insurers and brokers said.

 

The idea of federal support to help insurers cope in the event of a catastrophic cyberattack has been examined by the government in recent years, but has gained momentum with joint efforts at the Treasury Department, the Office of the National Cyber Director and the Department of Security Cybernetics and Infrastructure Security Agency last year. Government officials and the insurance industry plan to meet in April 2024 to define exactly what this program would look like.

Federal support in the event of a catastrophic attack would undoubtedly be necessary, said John Keogh, president and chief operating officer of insurance company Chubb. While the industry can absorb a major natural disaster, the effects of a cyberattack on a similar scale would quickly overwhelm its ability to cover losses.

Some cyberattacks have cost billions of dollars, including the 2017 NotPetya malware hack, which caused an estimated $10 billion in damage worldwide to shipping companies, healthcare systems, and logistics companies, among others. This case also led to lawsuits against insurance companies by policyholders.

Share