March 20, 2017
A systems failure at Southwest Airlines has resulted in a cyber claim of up to $100mn of which AIG is the lead insurer.
2,300 flights were cancelled over the space of five days due to an issue with a router at the airline which caused a systems outage.
AIG is understood to be the lead on the cover with the excess being placed in the US and London. Early reports suggest the claim will sit between $60mn and $100mn. Last year the airline said that the failure would lead to a fall in revenue for Q3 and estimated the impact would be around $82mn. Some are predicting that the loss will be at the higher end of the estimate, if this proves to be the case insures in London could be affected.
London insurers involved in the excess include Novae, Brit and Principai. It has been reported that Southwest Airlines could claim on their cyber policy as the wording of the policy agreed by AIG did not say that an outage had to be caused by a cyber-attack. Insurers have suggested that this claim might impact future airline policies with the extent of disruption caused by a single router failure.