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The AMRAE study describes 2024 as a positive year for the cyber insurance market, with rising but manageable claim numbers. There's a notable increase in cyber insurance uptake, especially among intermediate and medium-sized businesses, suggesting broader market penetration.
For the first time in five years, premium volume slightly dropped, with an average 18% reduction in annual premium rates for large companies and declining deductibles, indicating increased market flexibility.
However, the report identifies emerging concerns. Claims and payouts for large companies are increasing significantly. Also, a slight capacity increase is not commensurate with rate decreases, suggesting large companies may have reduced budgets more than they've expanded capacity. The study emphasizes the continued importance of accurate cyber risk exposure measurement given geopolitical tensions and new attack vectors.

"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 purpose of this article is to highlight the importance of taking a holistic approach to cyber. In particular, we argue that actuarial modelling should not be viewed stand-alone, but rather as an integral part of an interconnected value chain with other processes such as cyber-risk assessment and cyber-claims settlement."

"Using the lab, in numerical case studies, we identify two classes of measures to control systemic cyber risks: security- and topology-based interventions. We discuss the implications of our findings on selected real-world cybersecurity measures currently applied in the insurance and regulation practice or under discussion for future cyber risk control. To this end, we provide a brief overview of the current cybersecurity regulation and emphasize the role of insurance companies as private regulators."

"As businesses improved their resilience, cybercriminals adapted and ransoms escalated, calling insurability into question. Yet there remains little appetite for imposing restrictive conditionality in this highly competitive market. Instead, insurers have turned to governments to contain criminal threats and cushion catastrophic losses."

"We distinguish three main types of cyber risks: idiosyncratic, systematic, and systemic cyber risks. While for idiosyncratic and systematic cyber risks, classical actuarial and financial mathematics appear to be well-suited, systemic cyber risks require more sophisticated approaches that capture both network and strategic interactions."

"Companies and law firms must have adequate insurance coverage to fill gaps and to meet company insurance objectives."

"We conclude that the purchase of cyber insurance is indicative of an overall higher risk profile, but that having that insurance after experiencing a breach and formalizing cyber risk oversight within the audit committee reduces auditors’ perceptions of risk."

"Estimations of model parameters are presented under Bayesian framework using a combination of Gibbs sampler and Metropolis-Hastings algorithm. Predictions and applications of the proposed model in enterprise risk management and cyber insurance rate filing are discussed."

" Through this analysis we are able to address the question that, to the best of our knowledge, no other study has investigated in the context of cyber risk: is model risk present in cyber risk data, and how does is it translate into premium mispricing?"