Estimated reading time: 10 minutes
Will quantum computing hand cyber insurers a catastrophe? IBM’s John Buselli doesn’t think so. If one comes, he expects it to hit payment networks, not one company. He also says nobody has shown him how to price the risk.
John Buselli has spent a decade working almost exclusively on quantum safety and cryptography at IBM Research. He is Global Offering Manager there. At the Zywave Cyber Risk Conference in New York last week, he gave the keynote “Prepare, Not Panic: Analyzing the Future of Quantum Computing and Digital Risk” with questions from Jacqueline Goralczyk. She is Chief Compliance Officer at NY CREATES, which she called “a lab-to-fab nanotechnology company.”
She asked him the questions insurers care about. Is quantum a catastrophe risk? When does a loss occur? What should underwriters ask? IBM builds quantum computers. It also sells quantum-safe cryptography tools and services.
Quantum Computing Risk And The Cat Event Question
Goralczyk asked whether post-quantum cryptography becomes a cat event. “Again, it’s very difficult to predict the future. I don’t think so,” Buselli said. He has faith in global advisory and government efforts to move things forward. “Now, if you’re lagging in the approach, you may be a victim of it,” he said.
He doesn’t rule one out. “But if there is a cat event, I think it’s going to be in the supply chain,” he said. It would spread “across a trading ecosystem,” not stay inside one company. The payment network worries him most, including the ACH system.
“You don’t have to manipulate that many records in a payment transaction to affect end-of-day settlement,” he said. Banks must settle every day. An attacker who did it stealthily could cause real damage very quickly, he said.
The upgrade itself is the weak point, in his view. Trading partners will have to change their cryptography in step. “That’s where the risk is gonna be. In configuration management across trading partners,” he said. “We don’t do that very well yet.”
The First Quantum Attacks Won’t Send A Ransom Note
At first, a code-breaking quantum machine will sit with only a few players, Buselli said. That means “primarily China and the United States, if you get right down to it.”
He pointed to World War II. The Allies broke the Enigma machine and kept that fact secret, letting some attacks proceed. “Otherwise, they would have changed the codes,” he said. He expects quantum code-breaking to be handled the same way. “It will be used carefully, stealthily, as much as possible,” he said.
The early aim may be political, not financial, he said. A state could learn an adversary’s intentions and gain an edge “at the negotiating table.” Economic disruption would come later.
Goralczyk drew the contrast with ransomware. Nobody will call to say they have your data, she said. It will be “more of a covert operation looking for the key gems.”
Wider use comes later, Buselli said, perhaps in the latter part of the 2030s. By then a bad actor inside an organization might use it, not just a nation-state.
Harvest Now, Decrypt Later: When Does The Loss Occur?
No quantum machine he knows of can do any of this today, Buselli said. “It’s a future threat. Except for the issue of harvest now, decrypt later,” he said. Attackers can steal data now and decrypt it once a capable machine arrives. Data taken today that isn’t encrypted in a quantum-safe way “could be a candidate,” he said.
Not every file is worth a costly quantum attack. “Is your data of interest?” he asked. The shelf life of data varies by industry, use case, and the data itself, he said. Records that won’t matter in ten years make poor targets.
Stored data is a separate case. It is usually protected by symmetric encryption, which rests on different math. He sees no practical risk to it “today or for the next twenty or thirty odd years.”
Goralczyk spoke from the legal side. After a data theft, lawyers have often told clients the data was encrypted, and they were fine. “And that’s gonna change pretty rapidly,” she said.
She raised the timing problem for regulators. Will they date an event to 2027? Or to 2030, “because that’s when we found out”?
“When does the loss occur?” Buselli asked. “I may know when it’s stolen, but I may not know when it was decrypted.” Causation is open too, he said. Was it a quantum attack or a traditional one?
CINI flagged the same gap in June. Most cyber cover is claims-made. A 2026 theft decrypted in 2032 could fall outside the policy in force.
Digital Signatures, Code Signing And Agent Identity
The bigger problems arrive with a machine that can break today’s cryptography, Buselli said. Digital signatures rely on the same asymmetric cryptography. “Imagine a world where I no longer trust the identity of the digital signer,” he said. Ownership of a document would be in doubt too. He gave an insurance policy as the example. Who are the beneficiaries?
CINI’s podcast with DigiCert asked who pays when nobody can prove what happened to a file.
Code signing is another weak spot. Firmware and software updates depend on it, he said. Cars carry the same problem for longer. They stay on the road 15 to 20 years, CINI reported in July.
Identity worries him most. AI agents now run inside company systems and deal with other agents. Companies rely on cryptography to identify and govern them. “You can see how this problem is going to be runaway,” he said. Attackers already target AI agents, CINI reported in October.
“But again, a quantum machine does not exist to do that,” Buselli said. When one arrives, the threat becomes real for anyone who hasn’t upgraded.
What Underwriters Should Ask About Quantum Readiness
Goralczyk asked what underwriters will look at over the next five years. Buselli started with an old rule: “you can’t manage what you don’t understand.” His questions:
- Do you have a cryptographic inventory? Companies have never managed their cryptography, he said. It came built into products, packages, and firmware. He doesn’t expect a complete count. “That’s too complex. And by the way, you’ll never finish, because things change.” The inventory becomes continuous, like other vulnerability work. CINI’s Cyber Tzar podcast made the same case against point-in-time checks.
- Which data matters most? Start with the most important data, the longest tail and the greatest risk. “That’s where, you know, underwriters will probably be looking,” he said.
- What do your suppliers say? Third parties provide 50% to 80% or more of a company’s infrastructure, he said. Companies have little visibility into it. He urged them to demand answers from suppliers, “including companies like mine.” “Your liability is going to depend on how well I service you,” he said. CINI reported how one small vendor’s login reached 8.8 million Danish records.
- Who owns it? He looks for an executive owner, a budget and board-level responsibility.
- Can you handle the downtime? Migration may disrupt the business, he said.
Goralczyk said companies will weigh disruption now against disruption later. They can fix it now or “roll the dice.”
The work rests on familiar basics, she said. That means data mapping, asset inventories, data minimization and vendor risk assessments. “Don’t outthink it,” Buselli said.
The Quantum Migration Outlasts The Runway
The technology is real, Buselli said. Anyone can open an account and run programs on IBM’s quantum machines today. He still calls the field experimental. He sees future uses for insurers in climate modeling, reinsurance portfolio analysis, and actuarial work.
Buselli gave the industry consensus on timing. Fault-tolerant quantum machines should arrive around 2029 and 2030, “probably not of the capacity to do real cryptography.” By 2033 to 2035, “the probability increases very, very significantly,” he said. IBM plans its first fault-tolerant machine, Starling, for 2029, HPCwire reported. When fault tolerance arrives, he expects “that ChatGPT moment.”
The fix takes longer. The last cryptographic transformation began 25 to 30 years ago, he said. “While largely done, it’s still not finished.” This one will take at least five to seven years, he said. Large organizations may need seven to 12.
“We know quantum machines of enough capacity are within about five to seven years,” he said. “We don’t have any more time to wait.”
He added context right away. “That’s not meant to incite worry,” he said. “We have time if we start planning practically and purposefully.”
The replacement cryptography already exists. NIST ran an open competition about a decade ago. About 80 entities took part, he said. NIST published its first three post-quantum standards in August 2024. “We have the tools,” Buselli said. “What we need is the willpower and the investment.”
The work spans firmware, hardware, and software upgrades. “It’s as much a procurement management problem as it is a technology remediation problem,” he said. AI will help automate remediation and cut the cost, he said. It won’t eliminate the work.
Post-Quantum Cryptography Deadlines Converge On 2030 And 2035
NIST’s transition plan deprecates quantum-vulnerable public-key algorithms after 2030. It disallows them after 2035. NIST finalized the schedule in late October.
Regulators around the world have “gotten the message,” Buselli said. He cited the EU’s DORA and Cyber Resilience Act. He also cited US executive orders now flowing into OMB guidance. The guidelines converge on plans and major remediation by 2030 and completion by 2035, he said. Companies that want federal business will need to show a migration plan.
Israel’s financial sector is the only place he knows of with legal requirements that carry penalties and fines. The Bank of Israel told banks in January 2025 to submit quantum preparedness plans within a year.
Goralczyk said New York’s Department of Financial Services has started issuing guidance. It tells firms to fold quantum into their risk assessments and plan their migration. She knows of no US rule yet that fines firms for missing a deadline.
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How Do You Price Quantum Computing Risk?
Buselli put the hardest question back to the room. “How do you calculate the value of these risks?” he asked. “I keep asking that question. I can’t say that I’ve gotten good answers.”
At least one carrier has moved. Cowbell added explicit quantum computing cover to Prime One in April, CINI reported. Immunefi CEO Mitchell Amador sees far higher stakes. Quantum could be “game over for every bank and financial institution in the world,” he told CINI in June.
Buselli tries to dampen that kind of talk. “I hear a lot of panic in this space,” he said. “We have the tools, we have the know-how, we may not have enough people.”
His advice is to fix the systems you control, then press your suppliers. The question for each supplier is simple, he said. “Where are you, and when are you going to make me safe with these new standards of technology?”
FAQ – Quantum Computing Risk
Is quantum computing a catastrophe risk for cyber insurers?
IBM’s John Buselli doesn’t expect one. If a cat event comes, he expects it in the supply chain. Payment networks worry him most, since small changes could disrupt end-of-day settlement.
What is harvest now, decrypt later?
Attackers steal encrypted data today and wait to decrypt it once a capable quantum machine exists. Buselli calls it the one quantum threat that is live today.
When could quantum computers break today’s encryption?
Buselli expects fault-tolerant machines around 2029 and 2030, probably not yet able to break real cryptography. He says the probability rises very significantly by 2033 to 2035.
What are the NIST post-quantum deadlines?
NIST’s transition plan deprecates quantum-vulnerable public-key algorithms after 2030 and disallows them after 2035. Its first three post-quantum standards came out in August 2024.
What should underwriters ask about quantum readiness?
Buselli would ask about a cryptographic inventory, the most important data and supplier readiness. He would also ask about executive ownership, budget and downtime during migration.
How long does post-quantum migration take?
At least five to seven years, Buselli says. Large organizations may need seven to 12 years. He says companies have no more time to wait.
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