Research from Institut Teknologi Bandung in the Area of Risk Management Described (Cyber Insurance Ratemaking: A Graph Mining Approach): Insurance – Risk Management

2022 JAN 10 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Fresh data on insurance are presented in a new report. According to news reporting out of Bandung, Indonesia, by NewsRx editors, research stated, “Cyber insurance ratemaking (CIRM) is a procedure used to set rates (or prices) for cyber insurance products provided by insurance companies. Rate estimation is a critical issue for cyber insurance products.”

Funders for this research include Kementerian Riset dan Teknologi /Badan Riset dan Inovasi Nasional.

The news reporters obtained a quote from the research from Institut Teknologi Bandung: “This problem arises because of the unavailability of actuarial data and the uncertainty of normative standards of cyber risk. Most cyber risk analyses do not consider the connection between Information Communication and Technology (ICT) sources. Recently, a cyber risk model was developed that considered the network structure. However, the analysis of this model remains limited to an unweighted network. To address this issue, we propose using a graph mining approach (GMA) to CIRM, which can be applied to obtain fair and competitive prices based on weighted network characteristics. This study differs from previous studies in that it adds the GMA to CIRM and uses communication models to explain the frequency of communications as weights in the network. We used the heterogeneous generalized susceptible-infectious-susceptible model to accommodate different infection rates. Our approach adds up to the existing method because it considers the communication frequency and GMA in CIRM. This approach results in heterogeneous premiums. Additionally, GMA can choose more active communications to reflect high communications contribution in the premiums or rates. This contribution is not found when the infection rates are the same.”

According to the news editors, the research concluded: “Based on our experimental results, it is apparent that this method can produce more reasonable and competitive prices than other methods. The prices obtained with GMA and communication factors are lower than those obtained without GMA and communication factors.”

For more information on this research see: Cyber Insurance Ratemaking: A Graph Mining Approach. Risks, 2021,9(224):224. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks9120224.

Our news journalists report that more information may be obtained by contacting Yeftanus Antonio, Statistics Research Division, Institut Teknologi Bandung, Bandung 40132, West Java, Indonesia. Additional authors for this research include Sapto Wahyu Indratno, Rinovia Simanjuntak.

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