Can I read Post-Incident Audits on Cyber Insurance Discounts on EtoBox?

Post-Incident Audits on Cyber Insurance Discounts by Panda, Sakshyam; Woods, Daniel W; Laszka, Aron; Fielder, Andrew; Panaousis, Emmanouil is a scholarly article available to read on EtoBox.

What is Post-Incident Audits on Cyber Insurance Discounts about?

We introduce a game-theoretic model to investigate the strategic interaction between a cyber insurance policyholder whose premium depends on her self-reported security level and an insurer with the power to audit the security level upon receiving an indemnity claim. Audits can reveal fraudulent (or simply careless) policyholders not following reported security procedures, in which case the insurer can refuse to indemnify the policyholder. However, the insurer has to bear an audit cost even when the policyholders have followed the prescribed security procedures. As audits can be expensive, a key problem insurers face is to devise an auditing strategy to deter policyholders from misrepresenting their security levels to gain a premium discount. This decision-making problem was motivated by conducting interviews with underwriters and reviewing regulatory filings in the U.S.; we discovered that premiums are determined by security posture, yet this is often self-reported and insurers are concerned by whether security procedures are practised as reported by the policyholders. To address this problem, we model this interaction as a Bayesian game of incomplete information and devise optimal

Author

Panda, Sakshyam; Woods, Daniel W; Laszka, Aron; Fielder, Andrew; Panaousis, Emmanouil

Published

2019

Language

EN