Loss and premium calculation of network nodes under the spread of SIS virus

Abstract

In the big data and “Internet+” era, the research related cybersecurity risk has attracted much attention. However, Premium pricing for cybersecurity insurance remains in its early days. In this paper, we established a premium pricing method for cybersecurity risks. Firstly, the losses during the cyber infection is modeled by an interacting Markov SIS (Susceptible-Infected-Susceptible) epidemic model. we also proposed a premium simulation method called the Gillespie algorithm, which can be used for simulation of a continuous-time stochastic process. At last, as an example, we calculated the premiums by using premium principles and simulation in a simple network respectively. The numerical case studies demonstrate the premium pricing model performs well, and the premiums based on simulations are rather conservative, and recommended using in practice by comparing the results of premiums.