Seminar: Cyber-insurance: what is the right price?

Speaker: Henry Skeoch

Date/Time: 19-Nov-2020, 16:00 UTC

Venue: Virtual Seminar

Details

Abstract:

We show how the Gordon-Loeb Model for information security investment can be expanded to consider the optimal combination of security investment and cyber-insurance via a classical economic utility maximisation problem. This entails consideration of the costs and benefits of investment in security alongside purchasing insurance at an independent premium rate. Under both exponential (constant absolute risk aversion) and logarithmic (constant relative risk aversion) utility functions it is found that when the insurance premium is below a certain value, utility is maximised under insurance rather than security investment. These results suggest that cyber-insurance is a worthwhile undertaking provided it is not overly costly.

 

Bio:

Henry Skeoch is a second year PhD student on the UCL Centre for Doctoral Training in CyberSecurity, supervised by Profs David Pym and Christos Ioannidis. His research interests are concentrated around the economics of investment decisions in security, but also in the detailed technical aspects of systems and security to help produce models that have useful applications rather than being overly abstract. Henry started his educational journey as a scientist, graduating from Cambridge with a degree in Natural Sciences (Chemistry), before finding employment in the financial markets as a research analyst for a major investment bank covering interest rates and inflation for institutional clients. He has been fascinated by all aspects of technology for as long as he can remember.

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