Insuring Data Risks: Problems and Solutions

Abstract

The proliferation of valuable data assets and connectivity in the digital economy has been accompanied by intensifying cyber risks. However, systemic constraints including data ambiguities, legal uncertainty, and misaligned incentives have severely limited advancement of cyber insurance coverage relative to rising enterprise protection needs. This research provides a comprehensive analysis of key bottlenecks inhibiting cyber data risk insurability. It examines constraints stemming from historical data deficiencies, risk modeling complexities, opaque controls, and fragmented regulatory regimes. The study also evaluates internal challenges faced by insurers in advancing policies like claims ambiguities, talent gaps, and reliance on primitive actuarial techniques. It further proposes targeted legal, risk management and public-private partnership enhancements that can expand viable transfer of cyber data risks. These include graduated security frameworks, transparent data exchanges, resilience incentives, risk pooling structures and international cooperation. With balanced reforms, cyber insurance can systematically enable enterprises to secure data assets commensurate with their rising economic and societal value.

Cybercrime and the Legal and Ethical Challenges of Emerging Technologies

“…It emphasizes the importance of collaboration and information sharing between public and private sectors, as well as across jurisdictions, to address the global nature of these crimes. 11 Furthermore, the anonymity and accessibility enabled by technologies such as cryptocurrencies and the dark web necessitate a reevaluation of existing regulatory frameworks and enforcement mechanisms. Policymakers and regulators must strike a delicate balance between fostering innovation and ensuring adequate safeguards against economic crime.…”