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The paper provides a comprehensive overview of modeling and pricing cyber insurance and includes clear and easily understandable explanations of the underlying mathematical concepts. We distinguish three main types of cyber risks:…

Risk Management · Quantitative Finance 2022-12-06 Kerstin Awiszus , Thomas Knispel , Irina Penner , Gregor Svindland , Alexander Voß , Stefan Weber

Cyber insurance is a key component in risk management, intended to transfer risks and support business recovery in the event of a cyber incident. As cyber insurance is still a new concept in practice and research, there are many unanswered…

Cryptography and Security · Computer Science 2021-06-22 Jason R. C. Nurse , Louise Axon , Arnau Erola , Ioannis Agrafiotis , Michael Goldsmith , Sadie Creese

Facing the lack of cyber insurance loss data, we propose an innovative approach for pricing cyber insurance for a large-scale network based on synthetic data. The synthetic data is generated by the proposed risk spreading and recovering…

Social and Information Networks · Computer Science 2020-07-02 Lei Hua , Maochao Xu

We focus on model risk and risk sensitivity when addressing the insurability of cyber risk. The standard statistical approaches to assessment of insurability and potential mispricing are enhanced in several aspects involving consideration…

Risk Management · Quantitative Finance 2023-03-30 Gareth W. Peters , Matteo Malavasi , Georgy Sofronov , Pavel V. Shevchenko , Stefan Trück , Jiwook Jang

In this study an exploration of insurance risk transfer is undertaken for the cyber insurance industry in the United States of America, based on the leading industry dataset of cyber events provided by Advisen. We seek to address two core…

Risk Management · Quantitative Finance 2022-03-16 Matteo Malavasi , Gareth W. Peters , Pavel V. Shevchenko , Stefan Trück , Jiwook Jang , Georgy Sofronov

It is very challenging to predict the cost of a cyber incident owing to the complex nature of cyber risk. However, it is inevitable for insurance companies who offer cyber insurance policies. The time to identifying an incident and the time…

Applications · Statistics 2022-09-27 Maochao Xu , Quynh Nhu Nguyen

This chapter will first present a principal-agent game-theoretic model to capture the interactions between one insurer and one user. The insurer is deemed as the principal who does not have incomplete information about user's security…

Computers and Society · Computer Science 2020-01-01 Quanyan Zhu

The cyber risk insurance market is at a nascent stage of its development, even as the magnitude of cyber losses is significant and the rate of cyber loss events is increasing. Existing cyber risk insurance products as well as academic…

Optimization and Control · Mathematics 2023-10-09 Qikun Xiang , Ariel Neufeld , Gareth W. Peters , Ido Nevat , Anwitaman Datta

Cyber insurance is a complementary mechanism to further reduce the financial impact on the systems after their effort in defending against cyber attacks and implementing resilience mechanism to maintain the system-level operator even though…

Cryptography and Security · Computer Science 2023-12-06 Shutian Liu , Quanyan Zhu

This paper introduces a two-pillar cyber risk management framework to address the pervasive challenges in managing cyber risk. The first pillar, cyber risk assessment, combines insurance frequency-severity models with cybersecurity cascade…

Risk Management · Quantitative Finance 2025-01-13 Wing Fung Chong , Runhuan Feng , Hins Hu , Linfeng Zhang

Cyber insurance, which protects insured organizations against financial losses from cyberattacks and data breaches, can be difficult and expensive to obtain for many organizations. These difficulties stem from insurers difficulty in…

Cryptography and Security · Computer Science 2026-02-04 Danielle Jean Hanson , Jeremy Straub

We introduce a model for a market based economic system of cyber-risk valuation to correct fundamental problems of incentives within the information technology and information processing industries. We assess the makeup of the current day…

Cryptography and Security · Computer Science 2016-05-02 Timothy J. O'Shea , Adam Mondl , T. Charles. Clancy

Cyberinsurance is a powerful tool to align market incentives toward improving Internet security. We trace the evolution of cyberinsurance from traditional insurance policies to early cyber-risk insurance policies to current comprehensive…

Cryptography and Security · Computer Science 2007-05-23 Ruperto P. Majuca , William Yurcik , Jay P. Kesan

Nowadays, cyber threats are considered among the most dangerous risks by top management of enterprises. One way to deal with these risks is to insure them, but cyber insurance is still quite expensive. The insurance fee can be reduced if…

Cryptography and Security · Computer Science 2025-03-05 Ganbayar Uuganbayar , Artsiom Yautsiukhin , Fabio Martinelli , Fabio Massacci

Cyber insurance is a risk-sharing mechanism that can improve cyber-physical systems (CPS) security and resilience. The risk preference of the insured plays an important role in cyber insurance markets. With the advances in information…

Computer Science and Game Theory · Computer Science 2022-03-24 Shutian Liu , Quanyan Zhu

Cyber threats affect all kinds of organisations. Risk analysis is an essential methodology for cybersecurity as it allows organisations to deal with the cyber threats potentially affecting them, prioritise the defence of their assets and…

Cryptography and Security · Computer Science 2019-03-20 David Rios Insua , Aitor Couce Vieira , Jose Antonio Rubio , Wolter Pieters , Katsiaryna Labunets , Daniel Garcia Rasines

Risk perceptions are essential in cyber insurance contracts. With the recent surge of information, human risk perceptions are exposed to the influences from both beneficial knowledge and fake news. In this paper, we study the role of the…

Cryptography and Security · Computer Science 2022-10-28 Shutian Liu , Quanyan Zhu

When undertaking cyber security risk assessments, we must assign numeric values to metrics to compute the final expected loss that represents the risk that an organization is exposed to due to cyber threats. Even if risk assessment is…

Computer Science and Game Theory · Computer Science 2017-12-19 Andrew Fielder , Sandra Konig , Emmanouil Panaousis , Stefan Schauer , Stefan Rass

Our homes are increasingly employing various kinds of Internet of Things (IoT) devices, leading to the notion of smart homes. While this trend brings convenience to our daily life, it also introduces cyber risks. To mitigate such risks, the…

Computational Engineering, Finance, and Science · Computer Science 2024-08-27 Xiaoyu Zhang , Maochao Xu , Shouhuai Xu

Pricing decisions stand out as one of the most critical tasks a company faces, particularly in today's digital economy. As with other business decision-making problems, pricing unfolds in a highly competitive and uncertain environment.…

Computer Science and Game Theory · Computer Science 2024-09-04 Daniel García Rasines , Roi Naveiro , David Ríos Insua , Simón Rodríguez Santana
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