Financial Impact of Cloud Failure Could Hit $2.8B in Insured Loss>
Dark Reading – Kelly Sheridan
The public cloud industry is projected to continue growing revenue at a rate of 36% each year through 2026, according to a new report from AIR and Lloyd’s of London. As demand for cloud services grows, so too do the potential consequences of cloud failure. Downtime at a major cloud provider could hit $19 billion in ground-up losses, researchers report. New data from AIR and Lloyd’s of London demonstrates the financial impact of downtime incidents at several top cloud service providers. Their report shows how 12.4 million businesses in the US, which it states is the most established cyber insurance market, would be affected if cloud systems were to fail for a span of several hours to eleven days. Today’s insurance industry would be little help if a cloud service provider failed. In the event a cyber incident took a US-based top-three cloud provider offline for three to six days, researchers predict it would cost $6.9 billion to $14.7 billion USD in ground-up losses and $1.5 billion to $2.8 billion USD in insured loss. The gap is due to cyber insurers’ low penetration rates, especially among small- and medium-sized businesses, in addition to limited coverage. Most policies have low limits and long waiting periods, with about eight to 24 hours of downtime before coverage starts to kick in. Researchers say this is an opportunity for insurers to provide coverage for extreme scenarios. The cloud industry is highly concentrated, researchers say, with the top 15 cloud providers making up 70% of industry market share. More businesses are using these services: 37% of companies are expected to use infrastructure-as-a-service as their primary environment in 2018, and the number primarily relying on traditional on-prem infrastructure will drop to 43%.
Link: https://www.darkreading.com/cloud/financial-impact-of-cloud-failure-could-hit-$28b-in-insured-loss/d/d-id/1330891