LMA unveils framework for under-modelled cyber risks

The Lloyd’s Market Association (LMA) has published a new report that outlines a framework for under-modelled cyber exposures.

Called Scoping Out Systemic Cyber Risk, the report, which was published today (13 January 2024), aims to help Lloyd’s insurers manage exposure to lesser-known systemic cyber risks.

It focuses on two specific events, including an attack on an electronic healthcare record system, as well as an attack on an electronic chart display and information system used in shipping.

Kelly Malynn, underwriting product leader for cyber physical damage at Beazley and chair of the LMA’s cyber risk strategy group said: “One of the standout features of our report is its focus on the aggregation potential of cyber risks – particularly these lesser-known ‘other cyber’ scenarios.

“The interconnectedness of modern systems means that a single point of technological commonality can lead to widespread disruptions, underscoring the necessity for advanced risk modelling and comprehensive scenario planning to facilitate informed underwriting.”

Attack

The launch comes after a ransomware attack in June 2024 on Synnovis, a pathology laboratory that processes blood tests on behalf of several NHS organisations.

King’s College Hospital NHS Foundation Trust and Guy’s and St Thomas’ NHS Foundation Trust were the two most affected trusts, with more than 800 planned operations and 700 outpatient appointments needing to be rearranged.

Malynn noted that the LMA’s report was “timely” and will be “practical value” to the market.

Chris Mather, senior executive of technical underwriting at the LMA, added: “By working together to enhance our understanding of cyber threats, strengthen our resilience to cyber attacks and develop innovative risk management solutions, we can mitigate the potential for catastrophic disruptions.”