A recent 15-hour outage at Amazon Web Services (AWS) has raised questions about systemic loss to the cyber insurance market, but losses from temporary lapses in cloud services are unlikely to be catastrophic.
The incident is classified as “moderate” by cyber analytics provider CyberCube, which notes that it highlights the risk of concentration among cloud providers. The company suggests reviewing cloud-provider dependencies in portfolios and warns of potential impacts on system failure contingent business interruption (CBI) coverage and incident response costs.
Industry experts say there are lessons to be learned from the event, including diversifying cloud platforms and reviewing policy language to understand coverage triggers and waiting periods. The outage will likely be seen as a “near miss” for the insurance industry, with concerns more about eroding confidence in complex policies rather than catastrophic payouts.
The take-up of parametric solutions has lagged, leaving insurers struggling to adapt policies that include these elements. This can result in burdensome insurance recovery processes, discouraging clients from filing claims. Experts argue that the value proposition of cyber insurance must be reassessed, as the industry seeks to build trust with buying communities.
Source: https://www.insurancejournal.com/news/national/2025/10/22/844725.htm