Aon partners with Guidewire on dam attack scenario
Re/insurance broker Aon has collaborated with property/casualty platform provider Guidewire Software on a scenario for a hypothetical cyber attack on a US hydroelectric dam.
Aon and Guidewire said their analysis revealed that if such a scenario were to occur, where a hacker opens the flood gates of a hydroelectric dam, it would likely cause significant downstream flood damages and economic losses of up to $56 billion for local businesses and communities, resulting in ‘silent cyber’ losses for insurers of up $10 billion.
There are over 90,000 dams in the US, providing irrigation, hydroelectric power, flood control, and recreation.
Jonathan Laux, head of cyber analytics for Aon’s Reinsurance Solutions business, said: “Insurers must consider how changing technologies can cause ‘established’ perils such as flood to morph into new risks, with resulting changes to frequency and severity. By using scenarios such as this one, insurers have the ability to stress test their portfolios against new and emerging perils created by cyber risk. With that knowledge, insurers can take steps to mitigate risk, through reinsurance as well as working with businesses to increase their resilience.”
Matt Honea, director of cyber at Guidewire, added: “We face a huge challenge today, securing not only all laptops and phones, but all network connected devices. These connected devices are automating human tasks by powering more equipment and processing systems. We bring focus to these dam scenarios to highlight concrete examples of an extreme cyber event.”
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