Cyber Insurance and Security Interdependence: Friends or Foes?

Cyber insurance is a cyber risk treatment option which allows transferring losses to another party for a fee. Though researchers and practitioners, see cyber insurance as a desirable practice and the new market. One of the most important questions from the cyber security point of view is that of cyber insurance. Several studies have shown to be self-protecting. In this study, we investigate how security interdependence affects the self-protection with / without cyber insurance available to them. In particular, we are interested in comparing the investments with the degree of interdependence changes. In the study, we model a competitive cyber insurance market and takes no information asymmetry.