infonet-economy

Although, cyber risk has become a topic of great importance in today’s risk management and insurance is seen as a powerful means to handle it, the actual cyber insurance market is greatly underdeveloped. Challenges in the insurability of cyber risk were identified to be the central impediments to the market growth. The main goal of this paper is to investigate potential risk transfer schemes for cyber risk, which can improve its insurability and foster market development. The paper is the first approach to systematically discuss and compare different risk transfer options for cyber risk and test them in a numerical simulation approach. Scenario analysis is applied as a meaningful way to probe how the proposed risk transfer options would potentially cope with the financial implications of cyber related scenarios.