CyberCube Estimates $400mn - $1.5bn Global Insured Losses From the CrowdOut Event
25 July 2024 - 9:30AM
Business Wire
CyberCube, the leading provider of cyber risk analytics to
quantify cyber risk, estimates preliminary insured losses from the
July 19 CrowdOut event for the standalone cyber insurance market at
between $400mn and $1.5bn. The faulty CrowdStrike Falcon Sensor
update and subsequent outage - the CrowdOut Event - would represent
a loss ratio impact of roughly 3-10% on global cyber premiums of
$15bn today.
This scale of loss could make the CrowdOut event the largest
single insured loss event in the history of the affirmative cyber
insurance industry over the past 20 years. At the same time, an
event of this scale does not come close to the extreme scenarios
currently being modeled by cyber insurers and reinsurers.
Based on CyberCube’s current estimates, the event represents a
loss somewhere between the 1-in-2 and the 1-in-6 year industry loss
return periods, according to the company’s cyber catastrophe model
and industry exposure database. CyberCube’s Portfolio Manager
product, which is used by 30 of the 40 largest US and European
cyber insurers, shows far more destructive scenarios that can reach
loss ratios of 234% in more extreme events at 1-in-200 year return
periods. As such, the CrowdOut event is a major event for the cyber
insurance market but does not come close to the destructive
potential that leading insurers are holding capital against.
CyberCube’s current estimates are provisional and based on the
best information we have available, as the event is still
unfolding, with a relatively significant percentage of systems yet
to be restored. Each insurance carrier’s claims experience depends
on some pivotal criteria relating to the characteristics of their
specific portfolio including coverage for non-malicious system
failure, contingent business interruption (CBI), and the makeup of
insureds in that portfolio. While each insurance portfolio will
substantively differ in these respects and as such it would not be
accurate to apply cyber insurance market share allocations to reach
an individual carrier’s loss potential, we expect carriers to see
disproportionate losses in portfolios that have significant large
corporate exposures.
CyberCube's Cyber Aggregation Event Response Service (CAERS) was
activated as a result of the CrowdOut event. CAERS provides
up-to-date intelligence on major cyber catastrophes worldwide as
they unfold to ensure CyberCube clients have information that is
relevant and tailored to the insurance market. CyberCube will
continue to monitor this developing event and provide support for
customers in calculating the impact on their own cyber insurance
portfolios.
About CyberCube
CyberCube is the leading provider of software-as-a-service cyber
risk analytics to quantify cyber risk in financial terms. Driven by
data and informed by insight, we have harnessed the power of
artificial intelligence to supplement our multi-disciplinary team.
Our clients rely on our solutions to make informed decisions about
managing and transferring cyber risks. We unpack complex cyber
threats into clear, actionable strategies, translating cyber risk
into financial impact on businesses, markets, and society as a
whole.
The CyberCube platform was established in 2015 within Symantec
and now operates as a standalone company. Our models are built on
an unparalleled ecosystem of data and validated by extensive model
calibration, internally and externally. CyberCube is the leader in
cyber risk quantification for the insurance industry, serving over
100 insurance institutions globally. The company’s investors
include Forgepoint Capital, HSCM Bermuda and Morgan Stanley
Tactical Value. For more information, please visit www.cybcube.com
or email info@cybcube.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240725566739/en/
Yvette Essen, Head of Content, Communications & Creative,
yvettee@cybcube.com