Cyber Insurance Industry Braces for Impact from CrowdStrike Incident

Gerald Glombicki, a senior director at Fitch Ratings, has assessed the recent CrowdStrike incident, suggesting that the cyber insurance industry has largely anticipated the fallout. He believes that while there will be losses, the situation is manageable and not catastrophic for cybersecurity insurance firms. Glombicki noted that the market was fortunate, as cyber events with significant physical consequences could lead to much larger losses. The CrowdStrike glitch has particularly affected businesses that require constant availability, such as hospitals and airlines. Analyst Wolff indicated that while it is still early to gauge the total volume of claims, a surge in business interruption claims across various sectors is expected. She emphasized that the impact of this incident is more pronounced than previous cyber events, like NotPetya, due to the high adoption rates of cyber insurance in the U.S. Despite the anticipated claims, experts like Gonzales believe the overall insurance market will remain stable. He compared the potential losses from the CrowdStrike incident to those from last year's hurricanes, noting that the scale of insured entities differs significantly. Gonzales highlighted that primary claims would likely focus on business interruptions, which some policies may exclude, leading to potential litigation. Overall, while the CrowdStrike incident poses challenges for the cyber insurance sector, experts do not foresee a drastic shift in the industry's perception or operations.