The recent 15-hour outage at Amazon Web Services (AWS) has once again reignited concerns over potential systemic risks within the cyber insurance market. However, analysts say the temporary disruption in cloud services is unlikely to lead to catastrophic losses for the insurance industry.
Cyber analytics firm CyberCube classified the incident as a “moderate event” for insurers, warning that it underscores the risks associated with heavy concentration among major cloud service providers.
“This AWS outage highlights systemic concentration risk in the cloud services sector,” CyberCube said in a blog post. “With disruptions lasting 15 to 16 hours, and most insurance waiting periods ranging between 8 and 12 hours, this could represent a moderate cyber (re)insurance event.”
The company urged insurers and reinsurers to use the incident as an opportunity to reassess their exposure to cloud-provider dependencies within their portfolios.
CyberCube noted that insurance exposure could arise through system failure contingent business interruption (CBI) coverages, which protect against losses resulting from third-party service disruptions. Additionally, insurers may face costs related to incident response and data restoration.
Despite the prolonged outage, industry experts believe the event will have only a limited financial impact. Nonetheless, it serves as a reminder of the growing vulnerability of digital ecosystems—and the importance for insurers to factor in systemic risks tied to large-scale cloud providers such as AWS, Microsoft Azure, and Google Cloud.