The recent surge in cloud outage incidents and the growing need for dedicated insurance coverage have driven Menora Mivtachim to collaborate with global cyber insurance leader Parametrix to develop an innovative, first-of-its-kind insurance product in Israel — and one of the few worldwide — specifically designed to protect companies from cloud service failures.
Attorney Omer Kraft, Head of Special Risks and Chief Underwriter at Menora Mivtachim, stated: “Cloud outages have become more frequent in recent years, exposing companies to significant risks that demand effective protection and tailored insurance coverage.”
The rapid shift of businesses and organizations to cloud-based environments has heightened the importance of proactive risk mitigation and insurance coverage, especially as cloud outages have become increasingly common. In 2024 alone, 47 cloud service disruptions were recorded, many causing severe operational disruptions.
Notable examples include:
* December 2024: Microsoft Azure suffered a full data center outage in San Antonio due to power failures, lasting nearly a full day.
* October 2024: Google Cloud Platform (GCP) experienced a major outage in its Frankfurt data center, lasting over 6 hours due to electrical failures.
* December 8, 2021: Amazon Web Services (AWS) endured a historic outage, leaving popular U.S. websites offline for hours, causing widespread disruption and sparking consumer outrage.
These events underscore the tangible risks companies face when transitioning to the cloud. In 2023 alone, 40 cloud-related outages were reported, totaling 221 hours of downtime globally.
Kraft further referenced the July 2024 global outage caused by CrowdStrike, which paralyzed systems worldwide, resulting in billions of dollars in damages across numerous companies. He emphasized: “This was a red flag, demonstrating the devastating impact of critical system failures on global businesses.”
A Holistic Approach to Risk Protection
Menora Mivtachim and Parametrix’s new product offers companies financial security in the event of a cloud outage. The insurance provides fast, transparent compensation based on proactive monitoring of major cloud services like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure.
The coverage fills a critical gap in the market. Unlike traditional cyber insurance, which mainly covers data breaches or hacking incidents, this policy compensates for cloud service disruptions — including server failures — which standard cyber policies typically exclude.
Menora notes that existing cyber policies often require proof of damage and lengthy claims processes, covering only gross profit losses for outages exceeding 12 hours. In contrast, this new product offers pre-agreed compensation without requiring proof of damage, ensuring companies receive payouts within 15 business days — even for shorter outages.
The insurance is tailored for a wide range of businesses, from small companies to multinational corporations, with customizable coverage limits ranging from small sums to tens of millions of dollars.
Streamlined Underwriting for Fast Coverage
The underwriting process is efficient and straightforward:
* Companies provide basic details about their cloud environment and revenue.
* A pre-agreed coverage plan is offered based on this data.
* Once approved, companies receive immediate protection with rapid payouts in the event of a cloud outage.
Kraft concluded: “Our collaboration with Parametrix enables us to expand our insurance solutions and offer a unique, much-needed product for the digital era. We’re confident this product will draw widespread interest in the Israeli market and deliver essential coverage for companies reliant on cloud services.”
Sharon Haran, CCO of Parametrix, added: “This product combines Parametrix’s advanced technology, expertise, and U.S. market experience with Menora Mivtachim’s extensive knowledge of the Israeli insurance sector. Together, we aim to provide companies with a stable financial safety net against unexpected cloud disruptions.”
