Findings from Technical University Munich (TU Munich) in the Area of Insurance Reported (Risk Mitigation Services In Cyber Insurance: Optimal Contract Design and Price Structure): Insurance

2023 JUN 08 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Data detailed on Insurance have been presented. According to news reporting from Garching, Germany, by NewsRx journalists, research stated, “As the cyber insurance market is expanding and cyber insurance policies continue to mature, the potential of including pre-incident and post-incident services into cyber policies is being recognised by insurers and insurance buyers. This work addresses the question of how such services should be priced from the insurer’s viewpoint, i.e. under which conditions it is rational for a profit-maximising, risk-neutral or risk-averse insurer to share the costs of providing risk mitigation services.”

Financial support for this research came from Projekt DEAL.

The news correspondents obtained a quote from the research from Technical University Munich (TU Munich), “The interaction between insurance buyer and seller is modelled as a Stackelberg game, where both parties use distortion risk measures to model their individual risk aversion. After linking the notions of pre-incident and post-incident services to the concepts of self-protection and self-insurance, we show that when pricing a single contract, the insurer would always shift the full cost of self-protection services to the insured; however, this does not generally hold for the pricing of self-insurance services or when taking a portfolio viewpoint.”

According to the news reporters, the research concluded: “We illustrate the latter statement using toy examples of risks with dependence mechanisms representative in the cyber context.”

This research has been peer-reviewed.

For more information on this research see: Risk Mitigation Services In Cyber Insurance: Optimal Contract Design and Price Structure. The Geneva Papers on Risk and Insurance Issues and Practice, 2023. The Geneva Papers on Risk and Insurance Issues and Practice can be contacted at: Palgrave Macmillan Ltd, Brunel Rd Bldg, Houndmills, Basingstoke RG21 6XS, Hants, England.

Our news journalists report that additional information may be obtained by contacting Gabriela Zeller, Technical University Munich (TU Munich), Fak Math, Lehrstuhl Finanzmath, Parkring 11, D-85748 Garching, Germany.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1057/s41288-023-00289-7. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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