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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.

The paper explores convex risk measures with weak optimal transport penalties, demonstrating explicit representations via nonlinear transformations of loss functions. It delves into computational aspects, discussing approximations using neural networks and applies these concepts to diverse examples. Finally, it demonstrates practical applications in insurance and finance for worst-case losses and no-arbitrage pricing beyond quoted maturities.

"An adverse development cover (ADC) is a form of an excess of loss reinsurance contract that provides coverage for future loss payments relating to claims incurred prior to a specified date… A framework for assessing the value of an ADC from the perspective of the ceding insurer is developed. This value assists in making decisions regarding the acquisition of an ADC, comparing available options on offer and accounting for the ADC under the IFRS17 accounting standard."

Information about #fdic #insurance and communication about #bank #stability by the #federalreserve can reassure depositors and mitigate #bankruns, while communication from political leaders only influences their electoral base.

This study examines a #riskaverse #insured who buys deductible #insurance and uses a barrier strategy for reporting #losses. The #insurer has a bonus-malus system with two rate classes; shifting to a costlier class occurs upon loss reporting. The insured's tendency to underreport losses is established under specific conditions, with her strategic reporting threshold derived. Allowing insureds to choose deductibles reveals positive equilibrium values, challenging the assumption of full insurance optimality. This work explains the common underreporting of losses across non-life insurance sectors.

This study addresses #climate-induced decline in #honey production, a significant #risk for #beekeepers. A #parametricinsurance policy is discussed, using #weatherdata to trigger payouts for losses due to adverse conditions. The approach is evaluated using random forests, comparing beekeepers' losses to #insurance benefits under various weather #scenarios, alongside traditional methods. An #italian case example demonstrates pricing for different regions.

"In the current market practice, many #cyberinsurance products offer a coverage bundle for losses arising from various types of incidents, such as #databreaches and #ransomwareattacks, and the coverage for each incident type comes with a separate limit and deductible. Although this gives prospective cyber insurance buyers more flexibility in customizing the coverage and better manages the #risk exposures of sellers, it complicates the decision-making process in determining the optimal amount of risks to retain and transfer for both parties. This paper aims to build an economic foundation for these incident-specific cyber insurance products with a focus on how incident-specific indemnities should be designed for achieving #pareto optimality for both the #insurance seller and buyer. Real data on #cyberincidents is used to illustrate the feasibility of this approach. Several implementation improvement methods for practicality are also discussed."

The study proposes a method to assess #demographic #risk within the #solvencyii #regulations, using compact formulas to analyse #insurance portfolio inflows and outflows. It recommends a market-consistent valuation of liabilities for traditional and equity-linked policies. This includes evaluation of the Solvency #capitalrequirement of idiosyncratic and systematic risk, with a formula for the former and an algorithm for the latter.

This paper analyzes the constraints on the #insuranceindustry in providing larger capacity for #cyberrisk #insurance. The authors argue that cyber risk is unique in that it is both information-intensive to underwrite and heavy-tailed, leading to a tension between the need to raise large amounts of external capital to finance heavy-tailed risks and the high compensation demanded by capital providers due to information frictions.

Proposed #actuarial #models address concerns over #longevity #risk by incorporating stalling #mortality improvements and #heatwave effects. They offer a parsimonious approach to capturing recent mortality trends and enable more accurate forecasts. Findings indicate a higher #insurance #riskpremium tolerance in longevity swaps.