Cyber attacks could cost the Australian economy up to $16 billion in damages over the next decade.

That is the finding of a joint study by Cambridge University on behalf of the insurance giant Lloyd's.

The study found that out of 301 global cities, Sydney ranks 12th in terms of cyber attack exposure with $4.86 billion of economic growth at risk.

Lloyd’s City Risk Index ranks Sydney as the riskiest Australian city, followed by Melbourne, Brisbane, Perth, Adelaide and Canberra.

The researchers used a report from the accounting firm PWC to show the specific risks to Australia, highlighting a 109 per cent increase in detected security incidents in Australia, compared to a 38 per cent global average.

The warning adds weight to known risks after attempted cyber attacks at the Bureau of Meteorology, the Australian Bureau of Statistics and the Reserve Bank of Australia.

The Lloyd's index says other big risks include power outages, terrorism, sovereign default, oil price shock, heatwave, drought and floods.

Lloyd's global chief executive Inga Beale said cyber attacks were a constant threat of cyber attack was critical for all businesses.

“It's not just for banks to worry about — it impacts retailers, travel and hospitality firms, education and healthcare providers, and any business with proprietary information worth protecting,” Ms Beale said.

“Where a decade ago people would talk about preventing a cyber-attack, the reality is firms will be subjected to attacks.

“The issue is how you mitigate against that.”

Lloyd's said demand for cyber insurance in Australia has increased by 16,828 per cent in the past two years.

Proposed legislation is currently before the Australian Parliament that would require hacked companies to report the incident and alert customers if lose personal details, tax file numbers, medical records or credit card information.