The recent CrowdStrike-linked IT global outage presents an opportunity for the cyber insurance and reinsurance market to reset appropriately, according to Vincent Tizzio, President and CEO of AXIS Capital.
During today’s Q2 2024 AXIS Capital earnings call, Tizzio discussed the impact of the July 19th CrowdStrike outage on the cyber market.
He said, “When you think about the business interruption language associated within the primary form, when you think about the waiting period and the application of those waiting periods across different industries, we think it is an important opportunity for companies to take stock.”
Tizzio stated that AXIS is currently unaffected financially by the CrowdStrike incident. He acknowledged that the situation may develop over time, but for now, AXIS is comfortable with the current impact.
He added, “We think more importantly, for the industry language change around contingent BI, language around clarity on non-malicious events, and certainly the waiting period will come under increasing scrutiny.”
Various companies have issued their initial insured loss estimates for CrowdStrike, though their figures vary.
Parametrix estimates insured losses for US Fortune 500 companies (excluding Microsoft) to be between $540 million and $1.5 billion. CyberCube projects losses of $400 million to $1.5 billion for the standalone cyber insurance market. Coalition expects insured losses of $960 million for US cyber writers alone.
Tizzio also commented on the broader cyber reinsurance market, stating, “With respect to cyber reinsurance, we announced a quarter or so ago an interest in leaning into our reinsurance business.
“We saw an opportunity to provide solutions to our cedants, and from the AXIS point of view, we did so in a way that we feel is premium adequate, first. Secondly, being able to be executed with loss caps so that we are not creating conflict with our insurance portfolio. Finally, we liked the cedants’ portfolios, the information set that we were able to obtain in understanding in a very detailed way. We felt comfortable with the risk and we saw it as an offset to the changing insurance landscape in the small and delegated segments where we have cut back and we shrunk.”
