Researcher from University College London (UCL) Publishes New Studies and Findings in the Area of Sustainability Research (The barriers to sustainable risk transfer in the cyber-insurance market): Sustainability Research

2024 MAR 13 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Researchers detail new data in sustainability research. According to news reporting out of London, United Kingdom, by NewsRx editors, research stated, “Efficient risk transfer is an important condition for ensuring the sustainability of a market according to the established economics literature.”

Funders for this research include Engineering And Physical Sciences Research Council.

Our news editors obtained a quote from the research from University College London (UCL): “In an inefficient market, significant financial imbalances may develop and potentially jeopardize the solvency of some market participants. The constantly evolving nature of cyber-threats and lack of public data sharing mean that the economic conditions required for quoted cyber-insurance premiums to be considered efficient are highly unlikely to be met. This paper develops Monte Carlo simulations of an artificial cyber-insurance market and compares the efficient and inefficient outcomes based on the informational setup between the market participants. The existence of diverse loss distributions is justified by the dynamic nature of cyber-threats and the absence of any reliable and centralized incident reporting.”

According to the news editors, the research concluded: “It is shown that the limited involvement of reinsurers when loss expectations are not shared leads to increased premiums and lower overall capacity. This suggests that the sustainability of the cyber-insurance market requires both better data sharing and external sources of risk tolerant capital.”

For more information on this research see: The barriers to sustainable risk transfer in the cyber-insurance market. Journal of Cybersecurity, 2024,10(1). The publisher for Journal of Cybersecurity is Oxford University Press (OUP).

A free version of this journal article is available at https://doi.org/10.1093/cybsec/tyae003.

Our news journalists report that additional information may be obtained by contacting Henry R K Skeoch, Department of Computer Science, University College London (UCL), Gower Street, London, WC1E 6BT, United Kingdom. Additional authors for this research include Christos Ioannidis.

ORCID is an identifier for authors and includes bibliographic information. The following is ORCID information for the author of this research: Henry R K Skeoch (http://orcid.org/0000-0001-7062-2575).

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