Liu M. Embracing Risk: Cyber Insurance as an Incentive Mechanism for Cybersecurity

Morgan & Claypool, 2021. — 145 p. — (Synthesis Lectures on Learning, Networks, and Algorithms 26). — ISBN 9781636391403.This book provides an introduction to the theory and practice of cyber insurance. Insurance as an economic instrument designed for risk management through risk spreading has existed for centuries. Cyber insurance is one of the newest sub-categories of this old instrument. It emerged in the 1990s in response to an increasing impact that information security started to have on business operations. For much of its existence, the practice of cyber insurance has been on how to obtain accurate actuarial information to inform specifics of a cyber insurance contract. As the cybersecurity threat landscape continues to bring about novel forms of attacks and losses, ransomware insurance being the latest example, the insurance practice is also evolving in terms of what types of losses are covered, what are excluded, and how cyber insurance intersects with traditional casualty and property insurance. The central focus, however, has continued to be risk management through risk transfer, the key functionality of insurance.Introduction: What is Insurance and What is Cyber Insurance?
A Basic Cyber Insurance Contract Model
Insuring Clients with Dependent Risks
A Practical Underwriting Process
How to Pre-Screen: Risk Assessment Using Data Analytics
Open Problems and Closing Thoughts