As per Fitch Ratings, the disruption caused by CrowdStrike’s defective security software update last week that brought down internet services worldwide is unlikely to have any major financial impact on the insurance and reinsurance business globally.
According to Fitch Ratings, the global insurance and reinsurance business is probably not going to suffer any significant financial consequences from the disruption caused by CrowdStrike’s faulty security software update that caused internet services to go down globally last week. The ratings agency stated in a report on Monday that preliminary estimates indicate that insured losses might be in the region of mid-to-high single-digit billion dollars and that primary insurers would handle the majority of claims.
The results may assuage investor worries about lawsuits and claims resulting from the interruption. Most exposed insurers to these kinds of losses typically assign a portion of their responsibility to reinsurers. Microsoft Windows-powered systems were brought down by CrowdStrike’s (CRWD.O) update, limiting several businesses like banking, healthcare, and airplanes. According to Loretta Worters, an Insurance Information Institute spokesperson, “standard cyber insurance covers cloud downtime due to security failure, operational failure, or system failure of the insured’s own operations, but it typically does not cover downtime due to non-malicious cyber events at a third-party network service provider.”
Fitch, however, stated that the insurance market still finds it challenging to account for cyber risk.
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