Big PhRMA vs. Big Insurance = Big Irony & Big Lessons

-by emorejahongkong




The insurance industry is focused on Big PhRMA leader Merck & Co., which:

estimated... $870 million in damages [from] crippled Merck’s production facilities [by malware]... dubbed NotPetya [and] according to Western intelligence agencies... the creation of the GRU, Russia’s military intelligence agency

This caused Merck to learn how many PhRMA consumers feel:

stunned when most of its 30 insurers and reinsurers denied coverage... [as an] excluded... act of war.

But this was not a Russia-declared war on Merck. Instead, NotPetya was reportedly deployed in an undeclared war between Russia and:

Ukraine, [where]... the malware rocketed through government agencies, banks, power stations-- even the Chernobyl radiation monitoring system. Merck was apparently collateral damage. NotPetya contaminated Merck via a server in its Ukraine office... [and] hopped from computer to computer, from country to country. It hit FedEx, the shipping giant, Maersk, the global confectioner, Mondelēz International, the advertising firm, WPP, and hundreds of other companies.





"War" needs an updated definition, because:

Nation-states for years have been developing digital tools to create chaos... But increasingly those tools are being used in forms of conflict that defy categorization [whether as "war," "terrorism," "vandalism," "extortion," or "accident"]

Moreover. Anyone who says they have a firm grasp on this kind of risk, [Warren Buffett] said, "is kidding themselves." The start of a solution can be found in this buried lede:

A few years before NotPetya, China’s military and intelligence agencies were stealing the secrets of global corporations at an alarming rate, giving a boost to the cyber-security business. Most experts agree that threat has abated in the wake of a 2015 U.S.-China cyber-security agreement and a reorganization of the Chinese military.

In other words, the first big step to reducing cyber-risk is cyber-security agreements between all nations that have high-level 'cyber-warfare' capabilities. And what’s to prevent all those Russian, ex-Soviet, Chinese, North Korean, Iranian and other secretive and dishonest foreign governments from quietly and deniably enabling non-state actors?

Could the answer lie in the old (USSR-era) concept of peacekeeping through 'mutual assured destruction?' This seems likely to occur when more malware follows the example of NotPetya, which so easily:

“hopped from computer to computer, from country to country.”

But what about rogue non-state groups or individuals, analogous to the under-employed ex-Soviet nuclear weapon technicians whom we heard so much about in the 1990s? What seems necessary is maximum incentives for all state actors to cooperate in reducing risks towards everybody. There is an old concept designed for this type of purpose: Risk-pooling and cost-spreading through insurance.

In other words, Merck and its peers are finally being forced to appreciate why those of us who lack sufficient financial resources to 'self-insure' against biological bugs and viruses, and those whose greater resources still cannot prevent them from contagion, all need the biggest possible risk pooling and cost-spreading through national and eventually global insurance, with costs further reduced and minimized through shared responsibility for funding single payer.

Also experts, at hopping from country to country, are the riskier biological bugs and viruses and other consequences of Climate Change, including extreme weather and rising seas, which are even bigger emerging nightmares for insurers, and which will eventually cause an even bigger redefinition of "risk pool."