Perceptions of Corporate Cyber Risks and Insurance Decision-Making

Guido Smidt () and Wouter Botzen
Additional contact information
Guido Smidt: Aon Risk Solutions

The Geneva Papers on Risk and Insurance - Issues and Practice, 2018, vol. 43, issue 2, No 5, 239-274

Abstract: Abstract This study provides an analysis of individual perceptions of cyber risks amongst professional decision makers. Data are collected using a survey of corporate professionals who are engaged in risk and insurance decision-making in various functional roles mainly in large companies. The study focuses on the perceived probability as well as the anticipated financial impact of cyber risks. Behavioural factors—the availability heuristic, threshold level of concern, degree of worry and trust in one’s own organisation’s capabilities—are found to have significant influences on the perceived probability and impact of cyberattacks. The probability of a successful cyberattack is overestimated, and the financial impact is underestimated. Given the high perceived expected value of cyberattack losses relative to the costs of cyber risk insurance, it appears that professional decision makers deviate from the expected value-based decision-making by being reluctant to insure for cyber risk.

Keywords: availability heuristic; intuitive thinking; insurance demand; risk perceptions (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://link.springer.com/10.1057/s41288-018-0082-7 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:43:y:2018:i:2:d:10.1057_s41288-018-0082-7

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41288/PS2

DOI: 10.1057/s41288-018-0082-7

Access Statistics for this article

The Geneva Papers on Risk and Insurance - Issues and Practice is currently edited by Christophe Courbage

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan, The Geneva Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().