Calculating the Costs of a Global Tech Outage

July 29, 2024

The CrowdStrike tech outage caused nearly $2 billion in losses across the nation’s largest health care organizations, according to a new report.

Parametrix, a cloud monitoring provider, analyzed the financial fallout for Fortune 500 companies following the July 19 tech outage. The report indicated the health care sector faced the largest impact from the incident stemming from a faulty software update.

“The shift from traditional on-premise computing services to cloud-based services has… transformed the systemic cyber insurance risk,” the report noted. “The recent global outage of CrowdStrike, a system utilized by more than half of the Fortune 500, showed this starkly.”

Here’s what you need to know:

• By sector:  Health care faced the largest losses ($1.9 billion), followed by airlines ($1.15 billion), and banking ($860 million).
• Health care:  Among the Fortune 500, the estimated direct financial loss per health care company was $64.6 million. Airlines had the largest estimated per-company loss ($143.38 million).
• Key takeaway:  The widespread use of CrowdStrike sensors created a “risk-aggregator,” allowing for disruption across key sectors. The financial fallout was expected to be even bigger when you look beyond the Fortune 500.
• Status update:  In an update, CrowdStrike said more than 97 percent of Windows sensors are online as of Wednesday.
• Quotable:  “The event highlights the critical dependency of major corporations on cloud services, and the systemic risks posed by such disruptions,” the report notes.

The analysis is available to review online. Also, see HAP’s Emergency Management team’s bulletin with key recommendations for the health care community.