APPLICATION OF MARKOV MODEL IN DETERMINING CYBER INSURANCE PREMIUMS FOR COMPLETE GRAPHS TOPOLOGY

• Main Author: HASYIMY ATS-TSANY (NIM: 10114055), HILMA
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/27868
• Institution: Institut Teknologi Bandung

In recent years, companies often suffer from financial losses due to cyber attacks both from outside and inside the company’s computer network. The role of cyber insurace is very important to indemnify losses. Modeling and pricing is much harder and still in its infancy, due to lack of record on cyber losses from the company. The motivation of this thesis is to model the cyber risk within the network in the form of malware attack, by applying the ?-SIS epidemic spreading theory. Computer networks in a company is illustrated by a graph. Specifically, this thesis will observe only for complete graph with different N number of computers. Assuming the infection process that follows Poisson Process, it is concluded that the upper bound of infection probability is increased if N is increased. As a result, the amount of losses will increase, as well as the premium. In this thesis, Standard Deviation Premium Principle is used to calculate the cyber insurance premiums. In addition, this thesis also discusses the infection probability behavior of the changes in the parameter values of the rate of link-infection and rate of self-infection for every graph.