Cyber is the risk that is on everybody’s minds in the insurance market. Much has been written on the impact of cyber on the specialty classes, but little has been said about Aviation, which is more susceptible to cyber exposures than one thinks. Cyber has the potential to create the nightmare scenarios that keep an aviation underwriter up at night. Such scenarios would be business interruption caused by the hacking of a passenger booking system and physical damage caused by taking certain mechanical processes offline.
This exposure to cyber risks is not just a worry for aviation underwriters when we consider the wider role aviation plays in the global economy. According to Aviation Benefits, the Aviation industry supports $2.7 trillion (3.5% of world gross domestic product). In other words, if air transport were a country, its GDP would rank 21st in the world – on par with Switzerland and Sweden.
In 2017 airlines transported 35% of global trade by value according to The International Air Transport Association (IATA). The annual value of goods transported throughout 2017 stood at $5.6 trillion with a daily value of $15.3 billion. Therefore, it is no surprise that the Airline Industry posted an estimated net post-tax profit of $38 billion, according to IATA figures.
This white paper explores the impact of cyber risks on the aviation industry, from the aircraft themselves to airports. Yet, as ever in the connected world, there are risks but also opportunities, not just for the airline industry but for corporate risk managers and their (re)insurers.
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