At a glance
- Zurich has contributed to a ground-breaking report showing how cyber-crime and cyber-security could affect the future global economy
- The report, published by Zurich and the Atlantic Council think tank, provides recommendations for businesses and governments on how to mitigate future cyber risk
- In the report’s best-case scenario, the global economy would be £78 trillion better off compared to the worst-case scenario, in which the internet is overrun by hackers
Zurich has contributed to ground-breaking research that reveals how strong cyber-security measures could make a difference of £78 trillion to the global economy by 2030.
Zurich Insurance Group and the international affairs think tank, Atlantic Council, have collaborated on a new report that explores four possible scenarios, from a worst-case “Clockwork Orange” world dominated by hackers, to a “Cyber Shangri-La”, where strong cyber-security supports massive technological growth.
The report, Overcome By Cyber Risks? Economic benefits and costs of alternate cyber futures, uses economic modelling tools from the Pardee Center at the University of Denver, to gain an understanding of how cyber costs and benefits affect national GDP over time.
A £78 trillion difference
Based on current projections, cyber costs and benefits will result in a net global gain of £104 trillion by 2030.
In the report’s best-case cyber scenario, technological booms are driven and supported by strong cyber security, resulting in a net global gain of £124 trillion by 2030, £20 trillion higher than the current projection.
However, in the worst-case scenario, a state of perpetual cybercrime and cyber-warfare exists, with hacks against critical infrastructure leading to a net global gain of just £46 trillion – £78 trillion less than the best-case scenario.
“As far as we can tell, no one has ever examined the key question of how much the costs of cyber-security problems compare to the economic benefits of being connected,” said Jason Healey, author of the report and Senior Fellow at the Atlantic Council.
“Through research, modelling and thinking about how the future might be better, worse, or just different, we can now put answers to such questions.”
Cecilia Reyes, Zurich’s Chief Risk Officer, adds: “This report does an excellent job of creating potential scenarios that provide multiple perspectives from which to view the future of cyber risk and its economic impact.
“It accurately exhibits that the economic impact of technology is dynamic and its associated risks can be approximated and planned for – and reminds us of the importance of understanding those impacts and the actions we need to take.”
Planning for an uncertain future
“The focus for businesses in an interconnected world should be on how to bounce back from cyber risk events.”
Cecilia Reyes, Zurich’s Chief Risk Officer
Future cyber development is unlikely to resemble past circumstances. In order to deal with this uncertainty, the four alternate scenarios explored in the report are based on two major uncertainties: firstly: the dominance of governments versus the private sector in matters of cyber security; and secondly, whether risks will be largely manageable or become unmanageable to the point that stable and secure connectivity becomes a luxury.
The report also provides a series of recommendations for executives who are responsible for creating their companies’ cybersecurity protocols, as well as policymakers who have a hand in shaping national cybersecurity laws.
Among the recommendations for businesses, the report calls for a continued focus on resilience, and on the ability to bounce back from disruptions to make them as short and limited as possible.
This includes measures such as: building redundancy, incident response and business continuity plans; conducting scenario planning and exercises; and considering worst-case cyber futures when looking at business strategies.
“The focus for businesses in an interconnected world should be on how to bounce back from cyber risk events. It is very clear that businesses that want to protect themselves from cyber risks must adopt a mindset of resilience,” said Reyes.
Overcome by Cyber Risks? is the second report from Zurich and the Atlantic Council, and follows their 2014 collaboration, Beyond Data Breaches: Global Aggregations of Cyber Risk.
Barry Pavel, Vice President, Arnold Kanter Chair, and Director of the Brent Scowcroft Center on International Security, said: “The Atlantic Council, in conjunction with Zurich Insurance Group and the Frederick S. Pardee Center for International Futures, has done really groundbreaking work in examining how cyber costs and benefits might affect global economies in the years to come.
“The report’s recommendations offer a useful road map for policymakers, the private sector, and the general public alike on how to reap the benefits of the global internet and steer ourselves towards the most rewarding cyber futures.”
For more information please speak with your local Zurich contact.