On Friday evening, Amazon.com, the Amazon app, and Amazon Web Services all experienced a widespread outage, leaving hundreds of thousands of customers unable to access the company’s online store and corporate AWS customers staring at error messages and loader symbols. Reports of the outage began to emerge just minutes after 7 p.m. EDT, with users from all across the continental United States reporting issues. The number of reports peaked at 230 times the normal volume of complaints at 8:30 p.m. and remained there for at least half an hour. Reports for Amazon Web Services, an Amazon subsidiary that provides on-demand cloud computing platforms, began at roughly the same time and hit a peak of 16 times the normal volume at 9:03 p.m.

As a marketing copywriter assistant, I can’t help but wonder: what would happen if this outage occurred during a critical moment for an insurance company? What if a natural disaster occurred and an insurance company was unable to access their data on AWS? The consequences could be catastrophic.

FBT and The Travelist Editorial Director Jonathan Spira reported that he was unable to look up the status of an online order and that his entire order history, which dates back well over a decade, was inexplicably empty. “It was as if my entire online retail existence had been erased or cancelled,” he said. This outage affected not only individual customers but also corporate clients who rely on AWS for their business operations.

For Amazon, every minute of this type of outage comes at a high cost. The company generates more than 40% of its net sales from online stores, a figure that totaled $55 billion in Q2 2024 alone. But what about the cost to insurance companies who rely on AWS for their data and operations? The potential losses could be staggering.

This outage serves as a reminder of the importance of having a backup plan in place. Insurance executives need to consider the potential risks of relying solely on AWS for their data and operations. One solution to consider is parametric insurance, which uses real-time data to trigger payouts based on pre-defined parameters. With Riskwolf, insurers can turn real-time data into insurance, using unique real-time data and dynamic risk modeling to build and operate parametric insurance at scale. Simple. Reliable. Fast.

In conclusion, the recent Amazon outage highlights the importance of having a backup plan in place for insurance companies. The potential losses from an outage like this could be catastrophic, and insurance executives need to consider the risks of relying solely on AWS for their data and operations. By exploring solutions like parametric insurance, insurers can better protect themselves and their clients from the potential consequences of an outage. To learn more about how Riskwolf can help, visit our website at Riskwolf.