26 January 2023Insurance

Cloud insurer Parametrix says claims ‘triggered’ after MS Azure outage

Parametrix, a managing general agent (MGA) and  Lloyd’s Coverholder that underwrites parametric insurance against outages of the cloud, CDNs, or e-commerce platforms, has said that a service outage of Microsoft Azure that affected thousands of businesses and tens of thousands of users across multiple regions around the world has triggered its policy.

The cloud insurer has agreed to settle claim payments to eligible insureds “within weeks” of their confirmation of loss.

Claims are triggered as one of the ‘Big Three’ cloud service providers, which includes Amazon Web Services and Google Cloud Platform (GCP), suffered service outage bringing down multiple regions around the world. The incident lasted for two hours and 24 minutes, according to the proprietary Parametrix Cloud Monitoring System, which identified the event immediately. PCMS triggers coverage provided by Parametrix, the New York-headquartered insurance provider and Lloyd’s coverholder.

“We’re committed to supporting Parametrix policyholders who have been affected by this incident. We will swiftly help them mitigate any financial loss caused by the outage, according to the high standards we have set for service excellence,” said Yonatan Hatzor, co-founder and CEO of Parametrix.

Thousands of businesses and tens of thousands of users were affected by the outage, for which most companies impacted will be entirely uninsured.

Hatzor explained: “Companies which are not in possession of dedicated cloud downtime insurance may try to claim coverage under their dependent business interruption cyber cover, if they have it, but they will have to quantify their losses, which are unlikely to exceed their deductibles or waiting periods. This event demonstrates that the traditional cyber BI policies do not provide sufficient coverage to insureds.”

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More on this story

16 December 2022   Reinsurance capacity is provided by underwriters from Lloyd’s and Hannover Re.
23 October 2022   Parametrix Solutions’ policies cover financial losses for businesses when outages of the cloud or e-commerce platforms occur.