Property Claim Services (PCS) has published its first estimate for insurance industry losses from the Petya / NotPetya malware cyber attack that hit pharmaceutical giant Merck & Co. in June, putting the initial figure at $275 million.
PCS launched its new loss aggregation service for individual affirmative international cyber events, named the PCS Global Cyber service, at the beginning of September and has already designated two cyber insurance and reinsurance market loss events.
PCS’ first Global Cyber service loss estimate was for the Equifax hack attack, which it put at an insurance market impact of $125 million, however the firm said that the economic impact to the credit giant is expected to be much larger.
In the case of pharmaceutical giant Merck, which was hit by the Petya / NotPetya malware cyber attack in June this year causing a significant impact to its global operations, the size of the insurance and reinsurance market loss was always anticipated to be greater.
The disruption to Merck even impacted the firms ability to produce vaccines and medications in normal volumes, with production, delivery and distribution, back-office, research and sales operations all taking a hit. The result is a significant economic hit to the firm and now an initially estimated $275 million hit to global cyber insurers.
Merck is thought to have been the hardest hit by the Petya / NotPetya malware cyber attack, with many of its internal processes computerised and so halted or restricted by the effects of the malware.
It’s understood that Merck completely blew through its specific cyber insurance coverage because of this loss event, demonstrating the need for more capacity to serve corporations around the world as they grapple with the growing cyber threat.
It also demonstrates the potential for major insurance and reinsurance market losses, which while restricted by the size of the cyber covers in place today will grow significantly in years to come.