Skip to main content
Go to the home page of the European Commission (opens in new window)
English English
CORDIS - EU research results
CORDIS

Quantifying cyber risk: a computational insurance approach

Project description

Figuring out how much cyber risk isn’t risky

The number of devices connected to the internet will reach 125 billion in 2030, up from 27 billion in 2017. The fast-growing Internet of things, however, makes us more vulnerable in the cyber domain. Since it is not possible to achieve zero risk of cyberattacks, the question is how much risk can be tolerated. Risk quantification is necessary. The EU-funded QCYRISK project will infer loss distributions from insurance prices. It will also infer full cyber loss distributions, including how they vary based on firm-specific characteristics. The project will study synthetic distributions and real cybercrime data. A main objective is to provide a set of loss distributions for multiple cyber incident types adjusted based on a firm’s revenue and industry.

Objective

Quantifying cyber risk is an important step in assigning resources to prevention. Yet data limitations mean that current estimates ignore certain incidents (e.g ransomware), rarely provide the financial cost, and cannot describe how risk varies based on the firm’s revenue or industry. Surprisingly insurers sell cyber insurance for the ignored incident types and vary the price based on firm-specific characteristics. Extracting insurers’ cyber loss models could help firms manage risk, regardless of whether they purchase insurance.

The proposed action (QCYRISK) uses an iterative model fitting approach to infer loss distributions from insurance prices. The first research question develops the conceptual foundations by building an economic argument about how much information can be extracted from insurance markets. QCYRISK's second question seeks to infer full cyber loss distributions, including how they vary based on firm-specific characteristics. The final research question adopts an adversarial machine learning approach to probe the validity of the inferences, using both synthetic distributions and real cyber crime data.

In terms of results and dissemination, QCYRISK will provide a set of loss distributions for multiple cyber incident types adjusted based on the firm’s revenue and industry. These will be made available as a spreadsheet for real-world risk managers. We will also run a continuing education seminar for insurance professionals to raise awareness about the method. The developed method represents a new computational insurance technique that could be applied to extract information from a global total of €4.7 trillion insurance premiums.

Fields of science (EuroSciVoc)

CORDIS classifies projects with EuroSciVoc, a multilingual taxonomy of fields of science, through a semi-automatic process based on NLP techniques. See: The European Science Vocabulary.

You need to log in or register to use this function

Programme(s)

Multi-annual funding programmes that define the EU’s priorities for research and innovation.

Topic(s)

Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.

Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

MSCA-IF-EF-ST - Standard EF

See all projects funded under this funding scheme

Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

(opens in new window) H2020-MSCA-IF-2019

See all projects funded under this call

Coordinator

UNIVERSITAET INNSBRUCK
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 159 653,12
Address
INNRAIN 52
6020 Innsbruck
Austria

See on map

Region
Westösterreich Tirol Innsbruck
Activity type
Higher or Secondary Education Establishments
Links
Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 159 653,12
My booklet 0 0