Eireann Leverett of the University of Cambridge Centre for Risk Studies looks at control system related catastrophe scenarios and the economic impact of these scenarios with an eye towards how insurance and reinsurance policies will be written and priced.
Admittedly critical infrastructure cyber security is a new topic in an insurance industry that has been around hundreds of years. Eireann points out that insuring against malicious attacks is not new to the insurance company. They insured against piracy on the seas.
The session provides some relevant macro economics in easy to understand language and graphs, and Eireann admits “we’re inventing rough metrics in a land of no metrics”.
His initial efforts are related to an important cyber incident that could impact the US, UK and European bulk electric system. The % loss of GDP due to an incident sounds like a good measure if it can be credibly calculated.
The Q&A in this session was particularly good, which is understandable since there are more questions than answers at this time. It’s a fertile field for those looking for an important economic problem.
For what it’s worth … this was my 18-month old daughter’s favorite session.