In order to run tests on a simulator, you need to have simulator images installed on your machine. This process is performed by Xcode itself. You can list all available simulators using simctl by typing xcrun simctl list in terminal.
If you're missing a simulator, make sure Xcode is installed and use it to download the simulator. Take a look at the Preferences screen, some screenshots can be seen here.
Once the desired simulator is installed and returned by xcrun simctl list, double check its name in the list and make sure this name is found in the detox configuraton entry in package.json. The reference for the configuration options is available here.