Paper Number

1075

Paper Type

SP

Abstract

Cyber security attacks are on the rise not only on companies but also on private individuals. Although the underlying cyber risks can be addressed by technical cyber security measures, residual risks remain that may be addressed specifically with personal cyber insurance (PCI) policies. However, due to information asymmetry regarding the individual cyber risk profiles of policyholders, insurers currently lack a holistic approach to offer policyholders a fairer cyber risk-based premium structure that goes beyond pure flat rates. This implies that cyber risk-affine policyholders currently have to pay the same premium as cyber risk-averse policyholders. As a counter-approach, this paper transfers the risk behavior-based concept of usage-based insurance (UBI) to PCI and conceptualizes a “pay-how-you-surf" (PHYS) artifact, considering the specifics of cyber risks. Methodologically, we draw on the design science research approach by Peffers et al. (2007) and outline the first four steps of our research project.

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Jun 14th, 12:00 AM

The Lower the Risk, the Lower the Premium? Conceptualizing an Artifact for Usage-Based Pricing of Personal Cyber Insurance Policies

Cyber security attacks are on the rise not only on companies but also on private individuals. Although the underlying cyber risks can be addressed by technical cyber security measures, residual risks remain that may be addressed specifically with personal cyber insurance (PCI) policies. However, due to information asymmetry regarding the individual cyber risk profiles of policyholders, insurers currently lack a holistic approach to offer policyholders a fairer cyber risk-based premium structure that goes beyond pure flat rates. This implies that cyber risk-affine policyholders currently have to pay the same premium as cyber risk-averse policyholders. As a counter-approach, this paper transfers the risk behavior-based concept of usage-based insurance (UBI) to PCI and conceptualizes a “pay-how-you-surf" (PHYS) artifact, considering the specifics of cyber risks. Methodologically, we draw on the design science research approach by Peffers et al. (2007) and outline the first four steps of our research project.

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