Infrastructure at risk of cyber-attacks: Lloyd’s

Lloyd’s has published a new report highlighting the risk of cyber-attacks which could inflict significant physical damage on national infrastructure and privately owned assets. The report focuses on the importance of effective risk management and the role of insurers in helping customers build resilience to cyber-attacks. As malicious attacks increase in frequency, cyber represents a key opportunity for insurers to support businesses and societies through the products and services they provide.

The report examines three hypothetical scenarios involving politically motivated cyber-attacks intended to cause damage to physical environments. Both critical national infrastructure and privately owned assets are highlighted as potential targets of attacks from criminals or state-sponsored actors. The report goes on to outline the potential material impacts on businesses if risk managers are not aware of the risks associated with protecting their physical infrastructure from cyber incidents, including fire, explosion, flooding, or bodily injury.

Whilst most cyber-attacks are digital, physical cyber-attacks – defined as virtual attacks which trigger physical disruption – are becoming increasingly commonplace. The rise of state-sponsored cyber-attacks is a significant focus for businesses and governments, driven by an evolving geopolitical landscape in the wake of Russia’s invasion of Ukraine. The origin of cyber-attacks are difficult to trace, which means that nation-states can remain anonymous, adding to the complexities for customers and insurers.