Cyber Insurance and Post‑breach Services: A Normative Analysis
The study investigates how opting for cyber insurance impacts firms' risk management. It reveals that while cyber insurance often decreases proactive risk prevention (ex‑ante moral hazard), it enhances post‑breach mitigation efforts, improving outcomes. The key lies in contract design balancing breach coverage and co‑insurance rates, emphasizing the need for a robust risk mitigation market in cybersecurity management.