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Title: Cyber-risk decision models: To insure IT or not?
Authors: Mukhopadhyay, Arunabha
Chatterjee, Samir
Saha, Debashish
Mahanti, Ambuj
Sadhukhan, Samir K.
Keywords: Bayesian Belief Network
Security breach
Utility models
Issue Date: 2013
Publisher: SCOPUS
Decision Support Systems
Series/Report no.: 56(1)
Abstract: Security breaches adversely impact profit margins, market capitalization and brand image of an organization. Global organizations resort to the use of technological devices to reduce the frequency of a security breach. To minimize the impact of financial losses from security breaches, we advocate the use of cyber-insurance products. This paper proposes models to help firms decide on the utility of cyber-insurance products and to what extent they can use them. In this paper, we propose a Copula-aided Bayesian Belief Network (CBBN) for cyber-vulnerability assessment (C-VA), and expected loss computation. Taking these as an input and using the concepts of collective risk modeling theory, we also compute the premium that a cyber risk insurer can charge to indemnify cyber losses. Further, to assist cyber risk insurers and to effectively design products, we propose a utility based preferential pricing (UBPP) model. UBPP takes into account risk profiles and wealth of the prospective insured firm before proposing the premium. � 2013 Elsevier B.V.
Description: Mukhopadhyay, Arunabha, Indian Institute of Management Lucknow, Prabandh Nagar, Off Sitapur Road, Lucknow-226013, Uttar Pradesh, India; Chatterjee, Samir, Claremont Graduate University, United States; Saha, Debashish, Indian Institute of Management Calcutta, India; Mahanti, Ambuj, Indian Institute of Management Calcutta, India; Sadhukhan, Samir K., Indian Institute of Management Calcutta, India
ISSN/ISBN - 01679236
DOI - 10.1016/j.dss.2013.04.004
Appears in Collections:Management Information Systems

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