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Interdependent cyber risk and the role of insurers
RISE Research Institutes of Sweden, Digital Systems, Mobility and Systems. Swedish Defence University, Sweden; KTH Royal Institute of Technology, Sweden.ORCID iD: 0000-0003-2017-7914
CNR Consiglio Nazionale delle Ricerche, Italy.
2025 (English)In: Research in Economics, ISSN 1090-9443, E-ISSN 1090-9451, Vol. 79, no 3, article id 101059Article in journal (Refereed) Published
Abstract [en]

Increasing use of new digital services offers tremendous opportunities for modern society, but also entails new risks. One tool for managing cyber risk is cyber insurance. While cyber insurance has attracted much attention and optimism, interdependent cyber risks and lack of actuarial data have prompted some insurers to adopt a more proactive role, not only insuring losses but also assisting clients with preventive work such as managed detection and response solutions, i.e., investments in their own cybersecurity. The purpose of this paper is to propose and theoretically investigate yet a further extension of this role, where insurers facilitate security investments between interdependent firms, which get the opportunity to invest a share of their insurance premiums to improve the security of each other. It is demonstrated that if insurers can facilitate such investments, then under common theoretical assumptions this can make a positive contribution to overall welfare. The paper is concluded by a discussion of the relevance and applicability of this theoretical contribution in practice. 

Place, publisher, year, edition, pages
Academic Press , 2025. Vol. 79, no 3, article id 101059
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:ri:diva-78380DOI: 10.1016/j.rie.2025.101059Scopus ID: 2-s2.0-105001107893OAI: oai:DiVA.org:ri-78380DiVA, id: diva2:1965459
Note

The foundations of this paper were laid during U. Franke’s two-week stay with A. Orlando at the Istituto per le Applicazioni del calcolo in Naples in July 2022, supported by the Short Term Mobility Program (STM 2022) of the National Research Council of Italy(CNR), contract number 5446. A. Orlando was partially supported by the SERICS project (PE00000014) under the MUR NationalRecovery and Resilience Plan funded by the European Union – NextGenerationEU.

Available from: 2025-06-09 Created: 2025-06-09 Last updated: 2025-06-09Bibliographically approved

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2425262728293027 of 42
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