Authored by Maochao Xu and Shouhuai Xu, this report was presented by the Society of Actuaries Research Institute and marked its debut on February 22, 2023. It introduces a pragmatic quantitative framework tailored for modeling cyber risks within the smart home ecosystem, with a focal point on cyber insurance pricing. Comprising four integral components—identifying vulnerability-incurred cyber risks, classifying risks by business lines, modeling these risks, and determining insurance premiums and coverages—the framework offers immediate applicability for actuaries. The pivotal insight extracted underscores that the proposed quantitative framework and pricing strategies stand ready for swift adoption/adaptation by actuaries to address the burgeoning cyber risks in the thriving smart home insurance market.
Keywords: Architecture/Engineering, Audio/Video, Communications, Control & Monitoring Equipment/Sensors, Cybersecurity/Privacy, Energy Efficiency/Management, Internet of Things (IoT), Insurance