Fitch Ratings stated that the global insurance and reinsurance sector is expected to experience minimal financial repercussions from the recent outage caused by a problematic security software update from CrowdStrike, which disrupted internet services globally last week.
Initial estimates indicate that insured losses may range between the mid-to-high single-digit billions, with the majority of claims likely falling under primary insurers, according to the report released on Monday.
The findings may ease investor concerns regarding claims and litigation arising from the disruption. Insurers most at risk of such losses often transfer part of their liability to reinsurers.
CrowdStrike’s update, which crashed computers running Microsoft’s Windows operating system, impacted various sectors including airlines, banking, and healthcare.
“While standard cyber insurance policies typically cover cloud downtime caused by security, operational, or system failures within the insured’s own operations, they usually do not cover downtime resulting from non-malicious cyber incidents at a third-party network service provider,” explained Loretta Worters, a spokesperson for the Insurance Information Institute.
Fitch also noted that managing cyber risk remains challenging for the insurance industry.