Optimal Cyber Insurance Policy Design for Dynamic Risk Management and Mitigation

Rui Zhang and Quanyan Zhu

With the recent growing number of cyber-attacks and the constant lack of effective and state-of-art defense methods, cyber risks become ubiquitous in enterprise networks, manufacturing plants, and government computer systems. Cyber-insurance has become one of the major ways to mitigate the risks as it can transfer the cyber-risks to insurance companies and improve the security status of the insured. The designation of effective cyber-insurance policies requires the considerations from both the insurance market and the dynamic properties of the cyber-risks.