Department

Information Systems

Document Type

Article

Publication Date

11-2009

Abstract

Despite positive expectations, cyber-insurance products have failed to take center stage in the management of IT security risk. Market inexperience, leading to conservatism in pricing cyber-insurance instruments, is often cited as the primary reason for the limited growth of the cyber-insurance market. In contrast, here we provide a demand-side explanation for why cyber-insurance products have not lived up to their initial expectations. We highlight the presence of information asymmetry between customers and providers, showing how it leads to overpricing cyber-insurance contracts and helps explain why cyber insurance might have failed to deliver its promise as a cornerstone of IT security-management programs.

Journal

Communications of the ACM - Scratch Programming for All

Journal ISSN

0001-0782

Volume

52

Issue

11

First Page

68

Last Page

73

Digital Object Identifier (DOI)

10.1145/1592761.1592780

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