This study looks at how the cyber-insurance market works and why it’s difficult for it to be efficient and stable. The authors created a model of the market, including insurance buyers, insurance companies, and reinsurance companies. They found that because these different groups don’t share the same information and expectations about cyber risks and losses, it leads to imbalances in pricing and coverage. This means some participants may find cyber insurance very profitable while others find it costly. The study suggests that for the cyber-insurance market to work better, there needs to be more data sharing and better ways to predict and agree on the likelihood of cyber losses.
