Pricing cyber insurance for a large-scale network

Abstract: Facing the lack of cyber insurance loss data, we propose an innovative approach for pricing cyber insurance for a large-scale network based on synthetic data. The synthetic data is generated by the proposed risk spreading and recovering algorithm that allows infection and recovery events to occur sequentially, and allows dependence of random waiting time to infection for different nodes. The scale-free network framework is adopted to account for the topology uncertainty of the random large-scale network. Extensive simulation studies are conducted to understand the risk spreading and recovering mechanism, and to uncover the most important underwriting risk factors. A case study is also presented to demonstrate that the proposed approach and algorithm can be adapted accordingly to provide reference for cyber insurance pricing.