Lloyd's of London, the centre of the global insurance market, has published a report stating that a cyber-attack on the major ports in the Asia-Pacific region could cost $110bn. This highlights the catastrophic threats that cyber-attacks pose on companies globally.
Businesses leave themselves vulnerable to attacks by not committing enough funding towards their internal cyber strategy. Given the non-revenue generating nature of these preventative costs, they can easily be overlooked by ambitious CEOs seeking growth. However, as more companies are on the receiving end of these attacks, this is increasingly becoming a pertinent necessity.
This presents an opportunity for cybersecurity companies as increased expenditure is directed towards this industry. We have seen multiple private equity firms and private equity-back firms acquire in this space, most recently the take-private of British cyber software provider Sophos by US PE firm Thoma Bravo.
We only expect to see this trend continue as companies commit more wallet spend to cybersecurity defence.
According to a report released by Lloyd’s of London and produced by the University of Cambridge Centre for Risk Studies, the losses could occur in an extreme scenario in which a computer virus infects 15 ports across Japan, Malaysia, Singapore, South Korea, and China. What’s more, the report showed that the global economy is underprepared for such an attack with 92% of total economic costs uninsured, leaving an insurance gap of $101 billion.