With many companies migrating to the cloud…this new study from Lloyd’s should give you pause. This is a great topic to peel back with technology, business continuity and key business units. What would you do if you lose those services that reside in the cloud? What other options do you have for recovery?
Lloyd’s of London just recently released a report that noted that a cyber problem that temporary shuts down a top U.S. cloud computing provider could trigger as much as $19 billion in business losses, only a fraction of which would be insured.
The adoption of cloud computing services is proliferating and it is no coincidence that cyber risk is increasing as well. As more companies rely on ‘the cloud’ to operate, a select few providers have come to dominate the market. This reliance on a small number of companies creates the potential for systemic risk for service users.
Lloyd’s commissioned a new study in partnership with risk modeller AIR Worldwide. Cloud down analyses cloud service provider failure risk and highlights the expected financial impact on 12.4 million businesses in the US, the most established market for cyber insurance. The report sets out a ‘detailed accumulation’ modelling approach which provides a more accurate view of risk than standard market share based approaches – using industry exposure database records to identify relationships between vendors and insureds.