At Berkshire Hathaway’s annual investor meeting earlier this year, Warren Buffett and his top insurance executive Ajit Jain issued a headline-grabbing warning that Berkshire would exercise caution regarding cyber insurance — in fact, it advised insurance agents to only sell cyber policies if they absolutely had to do so to satisfy a client, and to expect losses. A primary reason cited is the difficulty in assessing the scale of losses possible from a single occurrence that spreads across technology systems, with Jain giving the hypothetical example of when a primary cloud provider’s platform “comes to a standstill.” “That aggregation potential can be huge, and not being able to have a worst-case gap on it is what scares us,” he said. Jain’s hypothetical seemed prescient when a quality control issue from cybersecurity firm CrowdStrike caused a worldwide IT outage that halted flights and freight, shuttered retail outlets, and caused hospitals to resort to charting on paper. “Insurers…
