Study Results from New York University (NYU) Broaden Understanding of Technology (Optimal Cyber-insurance Contract Design for Dynamic Risk Management and Mitigation): Technology

2023 OCT 04 (NewsRx) -- By a News Reporter-Staff News Editor at Tech Daily News -- Current study results on Technology have been published. According to news reporting originating in Brooklyn, New York, by NewsRx journalists, research stated, “With the recent growing number of cyberattacks and the constant lack of effective defense methods, cyber risks have become ubiquitous in enterprise networks, manufacturing plants, and government computer systems. Cyber insurance provides a valuable approach to transfer the cyber risks to insurance companies and further improve the security status of the insured.”

Funders for this research include National Science Foundation (NSF), Army Research Office (ARO).

The news reporters obtained a quote from the research from New York University (NYU), “The designation of effective cyber-insurance contracts requires considerations from both the insurance market and the dynamic properties of the cyber risks. To capture the interactions between the users and the insurers, we present a dynamic moral-hazard type of principal-agent model incorporated with Markov decision processes, which are used to capture the dynamics and correlations of the cyber risks as well as the user’s decisions on the protections. We study and fully analyze a case with a two-state two-action user under linear coverage insurance and further show the risk compensation, Peltzman effect, linear insurance contract principle, and zero-operating profit principle in this case.”

According to the news reporters, the research concluded: “Numerical experiments are provided to verify our conclusions and further extend to cases of a four-state three-action user under linear coverage insurance and threshold coverage insurance.”

This research has been peer-reviewed.

For more information on this research see: Optimal Cyber-insurance Contract Design for Dynamic Risk Management and Mitigation. IEEE Transactions on Computational Social Systems, 2022;9(4):1087-1100. IEEE Transactions on Computational Social Systems can be contacted at: Ieee-inst Electrical Electronics Engineers Inc, 445 Hoes Lane, Piscataway, NJ 08855-4141, USA.

Our news correspondents report that additional information may be obtained by contacting Rui Zhang, New York University (NYU), Dept. of Electrical and Computer Engineering, Brooklyn, NY 11201, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1109/TCSS.2021.3117905. 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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