Insurers Assess Losses from CrowdStrike Outage

Fitch Ratings has stated that the global insurance and reinsurance industry is likely to withstand preliminary loss estimates from a recent software incident at CrowdStrike, with potential insured losses ranging in the mid-to-high single-digit billion dollars. The most affected insurance lines will include business interruption and contingent business interruption, particularly in industries reliant on 24/7 operations like healthcare and airlines. The incident, triggered by a logic error in a CrowdStrike update affecting millions of Microsoft Windows devices, has raised concerns about the adequacy of current cyber insurance policies and their coverage for both malicious and non-malicious events. Aon highlighted the interconnected nature of software systems and the potential for increased focus on system failure coverage within cyber insurance. Insurers are preparing for a surge of claims, which may involve significant business interruption losses, especially for companies heavily reliant on CrowdStrike's services. Overall, the insurance sector is tasked with managing systemic exposures while maintaining coverage clarity for clients.