Pricing Cyber Insurance: A Geospatial Statistical Approach

Cyberspace is a dynamic ecosystem consisting of interconnected data, devices, and individuals, with multiple network layers com-prising identifiable nodes. Location-based information can significantly improve cyber resilience decision-making and facilitatethe development of innovative cyber risk pricing tools. This article is based on a methodology that uses company geospatial data toaccurately estimate the number of expected losses arising from cyberattacks. Our approach aims to build and compare statisticalspatial models that allow pricing cyber policies more effectively than traditional non-spatial methods by incorporating all availabledata. By accounting for spatial dependence, we can assess the risk of data breaches and contribute to the design of more efficientcyber risk policies for the insurance market.