Aggregate Cyber-Risk Management in the IoT Age: Cautionary Statistics for (Re)Insurers and Likes

by   Ranjan Pal, et al.

In this paper, we provide (i) a rigorous general theory to elicit conditions on (tail-dependent) heavy-tailed cyber-risk distributions under which a risk management firm might find it (non)sustainable to provide aggregate cyber-risk coverage services for smart societies, and (ii)a real-data driven numerical study to validate claims made in theory assuming boundedly rational cyber-risk managers, alongside providing ideas to boost markets that aggregate dependent cyber-risks with heavy-tails.To the best of our knowledge, this is the only complete general theory till date on the feasibility of aggregate cyber-risk management.



page 1

page 2

page 3

page 4


Heavy-Tailed Data Breaches in the Nat-Cat Framework & the Challenge of Insuring Cyber Risks

Considering cyber risk as a (man-made) natural catastrophe (Nat-Cat) sys...

Digitalization of COVID-19 pandemic management and cyber risk from connected systems

What makes cyber risks arising from connected systems challenging during...

A heavy-tailed and overdispersed collective risk model

Insurance data can be asymmetric with heavy tails, causing inadequate ad...

The Data that Drives Cyber Insurance: A Study into the Underwriting and Claims Processes

Cyber insurance is a key component in risk management, intended to trans...

Modeling Multivariate Cyber Risks: Deep Learning Dating Extreme Value Theory

Modeling cyber risks has been an important but challenging task in the d...

Guidelines for cyber risk management in shipboard operational technology systems

Over the past few years, we have seen several cyber incidents being repo...

On Fair Reinsurance Premiums; Capital Injections in a Perturbed Risk Model

We consider a risk model in which deficits after ruin are covered by a n...
This week in AI

Get the week's most popular data science and artificial intelligence research sent straight to your inbox every Saturday.