IDEAS home Printed from https://ideas.repec.org/a/pal/gpprii/v48y2023i2d10.1057_s41288-023-00288-8.html
   My bibliography  Save this article

How cyber insurance influences the ransomware payment decision: theory and evidence

Author

Listed:
  • Anna Cartwright

    (Oxford Brookes University)

  • Edward Cartwright

    (De Montfort University)

  • Jamie MacColl

    (Royal United Services Institute)

  • Gareth Mott

    (University of Kent)

  • Sarah Turner

    (University of Kent)

  • James Sullivan

    (Royal United Services Institute)

  • Jason R. C. Nurse

    (University of Kent)

Abstract

In this paper, we analyse how cyber insurance influences the cost–benefit decision-making process of a ransomware victim. Specifically, we ask whether organisations with cyber insurance are more likely to pay a ransom than non-insureds. We propose a game-theoretic framework with which to categorise and distinguish different channels through which insurance may influence victim decision making. This allows us to identify ways in which insurance may incentivise or disincentivise payment of the ransom. Our framework is informed by data from semi-structured interviews with 65 professionals with expertise in cyber insurance, cybersecurity and/or ransomware, as well as data from the U.K. Cyber Security Breaches Survey. We find that perceptions are divided on whether victims with insurance are more (or less) likely to pay a ransom. Our model can reconcile these views once we take into account context specifics, such as the severity of the attack as measured by business interruption and restoration and/or the exfiltration of sensitive data.

Suggested Citation

  • Anna Cartwright & Edward Cartwright & Jamie MacColl & Gareth Mott & Sarah Turner & James Sullivan & Jason R. C. Nurse, 2023. "How cyber insurance influences the ransomware payment decision: theory and evidence," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 48(2), pages 300-331, April.
    • Handle: RePEc:pal:gpprii:v:48:y:2023:i:2:d:10.1057_s41288-023-00288-8
    DOI: 10.1057/s41288-023-00288-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41288-023-00288-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41288-023-00288-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ahnert, Toni & Brolley, Michael & Cimon, David & Riordan, Ryan, 2022. "Cyber Risk and Security Investment," CEPR Discussion Papers 17403, C.E.P.R. Discussion Papers.
    2. Jan Martin Lemnitzer, 2021. "Why cybersecurity insurance should be regulated and compulsory," Journal of Cyber Policy, Taylor & Francis Journals, vol. 6(2), pages 118-136, May.
    3. Anna Cartwright & Edward Cartwright, 2019. "Ransomware and Reputation," Games, MDPI, vol. 10(2), pages 1-14, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kerstin Awiszus & Yannick Bell & Jan Luttringhaus & Gregor Svindland & Alexander Vo{ss} & Stefan Weber, 2022. "Building Resilience in Cybersecurity -- An Artificial Lab Approach," Papers 2211.04762, arXiv.org, revised Sep 2023.
    2. Terrence August & Duy Dao & Marius Florin Niculescu, 2022. "Economics of Ransomware: Risk Interdependence and Large-Scale Attacks," Management Science, INFORMS, vol. 68(12), pages 8979-9002, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:gpprii:v:48:y:2023:i:2:d:10.1057_s41288-023-00288-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.