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Cyber-risk decision models

Published: 01 December 2013 Publication History
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  • Abstract

    Security breaches adversely impact profit margins, market capitalization and brand image of an organization. Global organizations resort to the use of technological devices to reduce the frequency of a security breach. To minimize the impact of financial losses from security breaches, we advocate the use of cyber-insurance products. This paper proposes models to help firms decide on the utility of cyber-insurance products and to what extent they can use them. In this paper, we propose a Copula-aided Bayesian Belief Network (CBBN) for cyber-vulnerability assessment (C-VA), and expected loss computation. Taking these as an input and using the concepts of collective risk modeling theory, we also compute the premium that a cyber risk insurer can charge to indemnify cyber losses. Further, to assist cyber risk insurers and to effectively design products, we propose a utility based preferential pricing (UBPP) model. UBPP takes into account risk profiles and wealth of the prospective insured firm before proposing the premium. Display Omitted Proposed Cyber risk insurance products to minimize the impact of financial loss of security breach.Cyber risk insurance products complement security technology.Our proposed Copula aided Bayesian Belief networks model helps to asses cyber risk.Collective risk & Utility Theory used to computes premium for Cyber risk insurance products.Cyber risks mode for to decide to opt for cyber insurance or not for organizations.

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    Published In

    cover image Decision Support Systems
    Decision Support Systems  Volume 56, Issue C
    December 2013
    524 pages

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    Elsevier Science Publishers B. V.

    Netherlands

    Publication History

    Published: 01 December 2013

    Author Tags

    1. Bayesian Belief Network
    2. Copula
    3. Cyber-insurance
    4. Cyber-risk
    5. Premium
    6. Security breach
    7. Utility models

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