AIG leads Norsk Hydro’s cyber coverage, losses may top $40 millionPosted On: Mar. 26, 2019 10:46 AM CST
(Reuters) — Norwegian aluminum-maker Norsk Hydro may have lost more than $40 million in the week that followed a cyberattack that paralyzed parts of its operations, and a full recovery of information technology systems will take weeks or more, the company said.
Norsk Hydro had to halt some of its production on March 19 and switch other units to manual operation after hackers blocked its systems with ransomware.
While Hydro’s primary metals business and most other units were able to carry on production with workarounds and manual solutions, one of its main production units struggled to recover, company executives told a news conference on Tuesday.
On a preliminary basis, the financial impact during the first week was estimated at between 300 million and 350 million Norwegian crowns ($35 million and $41 million).
“Hydro has a solid cyber risk insurance policy with recognized insurers, with global insurer AIG as lead,” the company said, referring to American International Group Inc.
“The insurance has a ceiling,” Chief Financial Officer Eivind Kallevik told the news conference. He declined to be more specific regarding the policy’s cap.
Hydro meanwhile is still trying to get affected businesses back up to speed.
“In the most affected business area, Extruded Solutions, production is now at 70% to 80%, except for the Building Systems business unit, where operations remain almost at a standstill,” Hydro said.
The company said it hoped to see “a reasonable level of production and shipments” from building systems by the end of the week.
The company’s extrusion business transform aluminum ingots into components for carmakers, builders and other industries.
Hydro has said it will not pay hackers to unlock its files, preferring instead to restore them from backup servers.
“The company has now entered the recovery phase following the attack, gradually restoring IT systems in a safe and secure manner to ensure progress toward normal business while limiting the impact for people, operations, customers, suppliers and other partners,” Hydro said in a statement.
Mr. Kallevik said at the news conference that a full recovery of all systems would take “weeks or longer.”
Norsk Hydro’s shares were down 1.9% on Tuesday, lagging a 0.5% rise in Norway’s benchmark stock index.