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Organizations are interested in transferring their cyber-risks to insurers aiming to mitigate the cost of cyber-threats. However, cyber-insurance has not been widely accepted due to several obstacles. First, the lack of reliable data to measure the cyber-risks makes it hard to calculate the insurance premium. Second, there are legal and procedural hurdles for assessing the organizations security posture deterring insurer for auditing. On the other hand, the blockchain technology has been extensively popularized due to its ability to provide transparency and security. Blockchain applies the distributed ledger to store transaction histories, and the information is stored across a network of computers instead of on a single server. In order to improve the application of the cyber-insurance, in this research, we propose a new framework to insure a cyber-product using the blockchain technology. First, a vendor initiates a request for insuring a cyber-product, then the interested insurers participate in a sealed-bid auction by bidding their preferred premium for the insurance service. The auction winners will be selected as the insurers, and they receive tokens in return of their obligations. In the case of an indemnity request, the auditor checks the validity of a request, then calls the claim function to retrieve the corresponding amount from the funds collected from the insurers. Furthermore, we propose a new method to implement a sealed-bid auction for the insurance crowdfunding in smart contract.
Vakilinia et al. (Thu,) studied this question.