Adrian Johnson
TLDR:
Key Points:
- CrowdStrike outage will cost Fortune 500 $5.4 billion
- Cyber insurance will only cover 10-20% of losses
In a report by Parametrix, it is estimated that the global IT outage linked to CrowdStrike will result in direct financial losses of at least $5.4 billion for the Fortune 500, excluding Microsoft. Cyber insurance is expected to cover only a small percentage of these losses, between 10-20%. The healthcare sector is projected to see the biggest impact, with $1.94 billion in losses, followed by banking and airlines. The outage, caused by a defective software upgrade in CrowdStrike’s Falcon platform, underlines the interconnectedness and dependence of major global companies on technology. Cyber insurance policies are likely to be triggered by the outage, with impacts on various insurance lines such as business interruption, contingent business interruption, and errors and omissions. Airlines, including Delta, were among the hardest-hit industries, with an average per company loss exceeding $143 million. Despite the significant financial losses, Fitch Ratings does not anticipate a material impact on global insurers. The incident highlights the importance of comprehensive risk management and the need to evaluate dependencies on service providers.
