The past couple of years have seen cloud services move from theperiphery of most businesses to the mainstream.
Drawn by the cost savings, agility and scalability that thecloud has to offer, companies have been migrating to the cloud enmasse. A recent Harvard Business Review survey found 84 percentof companies had increased their reliance on the cloud in the pastyear.
At the core of this trend is a calculation by businesses thatthe benefits of the cloud outweigh the risks. Strange as it maysound, the benefits may outweigh the risks for the insuranceindustry, too. Of course, the type of risk insurers see in thecloud is different from most businesses, and has been alongstanding concern to underwriters. Even so, the cloud hasenabled security capabilities that substantially lower risk inother areas — at least to the point that it merits anotherlook.
The case against the cloud
Insurers have understood for a long time that they must manageaggregation of risk across the portfolio of products that theysell. Few places aggregate cyber risk as neatly as the cloud, andan unforeseen event that triggers multiple claims could spellbankruptcy, if not properly understood and managed.
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