The recent cybersecurity software incident at CrowdStrike is unlikely to have a material impact on global (re)insurance financial results, according to Fitch Ratings.
Initial market estimates suggest that global insured losses could range from mid to high single-digit billions in USD. Fitch asserts, however, that these losses are unlikely to materially affect (re)insurers due to ongoing claims and litigation.
The primary insurance lines impacted include business interruption, contingent business interruption, and cyber insurance. Smaller lines, such as travel insurance, event cancellations, and technology errors and omissions, will also feel the effects.
The rating agency adds that variations in policy terms and conditions across different regions, sectors, and lines of business contribute to the complexity of the situation.
Fitch advises that several factors will help mitigate insured losses, including the absence of insurance coverage, high deductibles, sublimits, and time element periods for business interruption claims.
Most business interruption claims from cyber events have time elements ranging from 8 to 12 hours, and it is expected that these claims will mostly fall within the retention limits of primary insurers.
Industries such as hospitals and airlines, which require 24/7 availability and often lack robust redundancies, will be more affected.
Furthermore, the agency observes that the APAC and EMEA regions experienced more significant workday disruptions compared to the Americas, which found a solution to the outage that required physical access to machines and, in some instances, a recovery key.
