CyberCube pegs global CrowdStrike loss at $1.5bn

Modelling firm CyberCube estimates that insured losses from the CrowdStrike outage will cost the standalone cyber insurance market between $400m and $1.5bn, making it the largest single-loss event in the history of the affirmative cyber market.

This loss figure would equate to between 3% and 10% of the $15bn annual global cyber premium, and therefore does not come close to the extreme scenarios currently being modeled by cyber insurers and reinsurers, CyberCube said.

It explained that a loss of this size represents somewhere between the 1-in-2 and 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,” said the cyber modelling firm.

CyberCube is the first company to give a concrete global insured loss figure for the event.

Parametrix Insurance Services, a provider of technology downtime insurance, believes insured losses among US Fortune 500 companies caused by last week’s CrowdStrike outage are likely to be between $540m and $1.8bn.

Fitch said earlier this week that preliminary market estimates of global insured losses range in the mid to high single-digit billion USD from the outage. But it seems this estimate includes losses across all lines, with Fitch saying business interruption, contingent business interruption and cyber will be the most affected.

Aon said the event is likely to be the most important cyber accumulation loss event since NotPetya in 2017. “However, the overall loss quantum is currently uncertain,” said Aon.