Although the lightning fast speeds of quantum computing will provide many benefits to insurance carriers, there’s also a big down side: increased cyber risk, Fitch Ratings noted in a recent briefing.
Late last month, Gerald Glombicki, director of Insurance for Fitch, noted that quantum computers are estimated to run 100 million times faster than current technology—speeds that will mean “seemingly unlimited long-term benefits” across industries.
But the processing power and speed that has the potential to boost research efforts, new product development and operating efficiencies also creates “the theoretical ability to undermine current encryption standards,” Glombicki added.
Encryption provides protection via highly complex mathematical formulas that cannot be solved at current computer speeds for many, many years, he explained, also noting encryption now serves “as the lynchpin protecting online commerce.”
That spells trouble for property/casualty insurers and reinsurers that sell cyber insurance coverage. In addition, all types of insurers—including life and health insurers—may be prime targets of cyber attacks, he suggested.
Insurers are viewed as rich targets for cyber attacks given the access to large volumes of personal healthcare and financial data.
Quantum computers could decrypt the complex formula behind encryption standards “in less than a day,” Glombicki wrote. “Thus, if quantum computers are first fully developed and made operational by ‘bad actor(s),’ the risk of compromises to current encryption is real,” he said, also outlining the more positive flip side—quantum computers being employed by friendly governments, major cloud providers or other friendly technology firms initially, so that they are used to enhance encryption instead.
Which will happen?
Notes Glombicki: “Industry pundits are mixed as to when the disruption to encryption will take place, with estimates ranging from imminent to 30 years out.”
The full discussion is available on Fitch’s website: “Fitch Rtgs: Quantum Computing a Potential Cyber Risk for US Insurance Cos.”
Source: Fitch Ratings