Exact Insurance Premiums for Cyber Risk of Small and Medium-Sized Enterprises

As cyber attacks have become more frequent, insurance premiums increased, resulting in the need for better modeling of risk. Toward this direction, Jevtić and Lanchier [ Insur. Math. Econ. 91 (2020) 209–223] proposed a dynamic structural model aggregate loss distribution risk small medium-sized enterprises under assumption tree-based local-area-network topology that consists combination Poisson process, homogeneous random trees, bond percolation processes, cost topology. Their assumes contagion spreads through edges network with same fixed probability both directions, thus overlooking security environment implemented most networks, their results give an exact expression mean but only rough upper bound variance. In paper, we consider bidirectional version which certain moving toward lower level assets another higher network, realistic environment. addition, our mathematical approach is quite different leads to expressions variance loss, therefore premiums.