The rapid development of cyber insurance market brings forward the question about the effect of cyber insurance on cyber security. Some researchers believe that the effect should be positive as organisations will be forced to maintain a high level of security in order to pay lower premiums. On the other hand, other researchers conduct a theoretical analysis and demonstrate that availability of cyber insurance may result in lower investments in security. In this paper we propose a mathematical analysis of a cyber-insurance model in a non-competitive market. We prove that with a right pricing strategy it is always possible to ensure that security investments are at least as high as without insurance. Our general theoretical analysis is confirmed by specific cases using CARA and CRRA utility functions.

Preventing the drop in security investments for non-competitive cyber-insurance market / Martinelli, F.; Orlando, A.; Uuganbayar, Ganbayar; Yautsiukhin, A.. - 10694:(2018), pp. 159-174. ((Intervento presentato al convegno 12th International Conference on Risks and Security of Internet and Systems, CRiSIS 2017 tenutosi a fra nel 2017 [10.1007/978-3-319-76687-4_11].

Preventing the drop in security investments for non-competitive cyber-insurance market

Orlando A.;Uuganbayar G.;Yautsiukhin A.
2018

Abstract

The rapid development of cyber insurance market brings forward the question about the effect of cyber insurance on cyber security. Some researchers believe that the effect should be positive as organisations will be forced to maintain a high level of security in order to pay lower premiums. On the other hand, other researchers conduct a theoretical analysis and demonstrate that availability of cyber insurance may result in lower investments in security. In this paper we propose a mathematical analysis of a cyber-insurance model in a non-competitive market. We prove that with a right pricing strategy it is always possible to ensure that security investments are at least as high as without insurance. Our general theoretical analysis is confirmed by specific cases using CARA and CRRA utility functions.
Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
GEWERBESTRASSE 11, CHAM, CH-6330, SWITZERLAND
Springer Verlag
978-3-319-76686-7
978-3-319-76687-4
Martinelli, F.; Orlando, A.; Uuganbayar, Ganbayar; Yautsiukhin, A.
Preventing the drop in security investments for non-competitive cyber-insurance market / Martinelli, F.; Orlando, A.; Uuganbayar, Ganbayar; Yautsiukhin, A.. - 10694:(2018), pp. 159-174. ((Intervento presentato al convegno 12th International Conference on Risks and Security of Internet and Systems, CRiSIS 2017 tenutosi a fra nel 2017 [10.1007/978-3-319-76687-4_11].
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11572/295873
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