Downtime: The tip of the iceberg

The $600B problem your policy probably can't see

Late October 2025, AWS went down. For roughly six hours, thousands of businesses across the globe, from e-commerce checkouts to healthcare platforms, found themselves staring at error screens. Payments failed. Dashboards went blank. Customer-facing apps quietly stopped working. The incident was a reminder of something the insurance industry has been slow to reckon with: when systems fail, the damage rarely stops at the invoice.

A landmark study by Splunk and Oxford Economics surveyed 2,000 executives from the Global 2000 and put a number on it: $600 billion in annual losses from unplanned downtime. That's up 50% in just 2 years. On average, a company now loses $300 million a year to unplanned cloud outages and service degradation.

And that's just the visible tip of the iceberg.

The invisible losses

Traditional business interruption insurance tends to focus on the ledger items that are easy to point at. Lost revenue? Covered (maybe). But cloud downtime carries a long tail of costs that most policies were never designed to see.

The hidden costs are the ones that linger. After a major cloud outage, stock prices drop an average of 3.4% (up from 2.5% in 2024, signalling that investors now view operational resilience as a material risk, not just an IT issue). Meanwhile, engineering teams are pulled off product work to deal with the damage. Innovation stalls. Competitors move.

• $15,000 Average cost per minute of downtime 
• 90% of technology leaders report a surge in customer support demand after an outage
• 3x More disruptive to publicly disclose a data breach than just 2 years ago

“27% of C-level executives say a single day of cloud outage costs them up to half of their daily revenue.”

Munich Re, Global Cyber Risk and Insurance Survey 2026

Mind the gap

Conventional business interruption policies were built for a different era - physical damage, factory fires, flood-damaged stock. They require you to prove loss. Adjusters are dispatched. Documents are filed. Disputes arise over what was "caused" by the incident and the indemnity amount to be settled. By the time a settlement arrives, your CFO has already spent months firefighting. 

Meanwhile, business doesn’t wait for anyone. A pre-defined and agreed limit of indemnity in parametric insurance solves for this and saves a lot of time your team would have otherwise spent recovering losses.

For digital businesses, where cloud outage now sits alongside cybersecurity incidents and human error as the leading causes of downtime, this model doesn't fit. According to the Splunk 2026 report, organisations endure an average of 60 downtime incidents each year (and the true number is likely much higher). The cause is often intangible. The damage is often deferred. And the claims process adds insult to injury at exactly the moment you need clarity most.

An insurance model built for today’s risks: parametric

Parametric cloud outage insurance works on a fundamentally different principle. Instead of measuring loss after the fact, it defines a trigger in advance, an objective, measurable event, and pays out swiftly when that trigger is hit.

No adjusters. No disputes. No waiting.

That's the logic at the heart of parametric: if X happens, Y triggers. You know exactly what happens when things go wrong before they go wrong. That clarity has real value in reducing uncertainty, especially as the hidden costs of cloud downtime compound in the background.

The beauty of parametric isn't just speed. It's that the payout isn't conditional. The trigger fires, the funds arrive, and you decide where they're most needed, whether that's emergency infrastructure, a brand trust campaign, overtime for your engineering team, or simply stabilising cash flow while revenue recovers.

That flexibility is particularly valuable because downtime's damage is rarely clean. With a parametric payout already in your account, you're not waiting on a claims process to fund your recovery.

The advantage belongs to those who ride through risk

The Splunk research is clear that the most resilient organisations suffer less downtime, lower direct costs, and far less damage from hidden costs. What sets them apart isn't caution, it's preparation. They invest smarter. They plan for failure so they can continue taking the risks that business requires. At Mantas, we consider risk the cost of doing business, not something to avoid, but a challenge to brave head on. 

Parametric cloud outage insurance doesn't prevent downtime. Nothing does, entirely. Human error alone accounts for the majority of incidents, and even the most sophisticated organisations experience degradation. What parametric changes is the consequence. It converts the open-ended uncertainty of "how much will this cost us?" into a defined, known outcome. It's the difference between crossing your fingers hoping you don’t get severely impacted and knowing exactly what will happen when crisis strikes.

In the wake of a major outage, uncertainty is the cost, in leadership bandwidth, investor confidence, and the state of survival that slows every decision. Parametric has the answers.

"Being a resilience leader means being able to sleep at night knowing the business will keep running even when the unexpected happens."

— Greg Leffler, Director of Developer Evangelism, Splunk

We don't believe in business without risk. We believe in being ready for it, so that when the trigger fires, the response is already in motion.

Downtime is inevitable. Uncertainty about what happens doesn’t have to be.

Sources 

Splunk / Oxford Economics, The Hidden Costs of Downtime 2026

Munich Re, Global Cyber Risk and Insurance Survey 2026

Ookla, AWS Outage Q4 2025