Amazon Web Service (AWS) outage is Connected Risk in Motion says Russell 

The recent outage at Amazon Web Service (AWS) that has impacted websites and apps as diverse as Reddit, Snapchat, Signal, Duolingo and HM Revenue and Customs is an example of Connected Risk in motion, says Russell. 

AWS is a critical supplier to many companies and governments, whose products and services run on cloud infrastructure. AWS has the largest market share in the global cloud infrastructure services market, with estimates placing its portion at 30%. AWS, along with Microsoft’s Azure and Google Cloud, form the “Big Three” representing 60% of all cloud services. The cloud infrastructure services revenues are expected to exceed $400 billion for the first time this year, according to Statista. 

Other impacted companies include Ring, Lloyds Bank along with its subsidiaries Halifax and Bank of Scotland, Amazon Prime, Alexa, Hulu, Disney+, WhatsApp and Delta Air Lines. Key workplace services including Slack, Zoom, Atlassian and Canva are experiencing issues too. 

Julian Kirkman-Page, Head of Business Development at Russell said: 

“The AWS outage is Connected Risk in motion. A tier one supplier has been impacted that has sent ripple effects across companies and governments which rely on that supplier, which now cannot provide their services. 

Consequently, this has created in the short-term reputational damage for all companies involved, as users frustrated by their inability to access their services, are complaining on social media and that, in turn, is being amplified across the media. 

It is these intangible losses or outcome-based losses that concern corporates, as we highlighted in a recent survey of risk managers from the Russell Working Group. The survey identified reputation, cyber, and non-damage BI as being identified as key drivers of losses. Losses that traditional insurance coverage is not adequately provided for. 

However, the warning signs are flashing bright and loud on the risk dashboard for corporates and insurers. Corporates are calling for new types of outcome-based Non-damage Business Interruption coverage that cover them for any eventuality (or outcome) no matter the peril that caused the event. The Amazon outage helps to define this need.”