Assessing the impact of cyber risk perception on cyber insurance purchase decisions
Scientific Papers of Silesian University of Technology Organization and Management Series · 2023
The goal of this paper is to investigate how cyber risk perception influences medium and large companies' decisions to purchase cyber insurance.Design/methodology/approach: The study collected data from 386 managers in medium and large Polish enterprises through a questionnaire.It examined managerial perceptions of cyber risk, considering firm attributes like size, age, and type.Various statistical methods, including Pearson's chi-square test, multiple correspondence analysis, and the random forests classifier, were employed for comprehensive data analysis.Findings: The study highlighted the pivotal role that perceptions of cyber risk play in shaping decisions concerning cyber insurance.Managers' perceptions regarding the gravity and probability of cyber threats had a significant impact on the choices made by their organizations.Furthermore, the study identified the presence of the availability heuristic as a noteworthy factor influencing decision-making in the realm of cyber insurance.Moreover, specific determinants emerged as influential in a company's decision to invest in cyber coverage.These determinants encompassed the size of the employee base, annual turnover, the severity of previous cyber losses, and the frequency of successful cyber-attacks experienced by the firm over the preceding five years. Research limitations/implications:The study recognizes potential biases, including non-response and sampling frame bias, as well as the limitations of self-reported data.However, it offers valuable insights for policymakers in enhancing cyber-attack resilience through cyber insurance.Future research should explore factors influencing cyber insurance purchases, examine the complexity of cyber risk perception, and consider context-specific studies and multidisciplinary approaches.Practical implications: The outcomes of this research have practical implications for both businesses and policymakers.It provides insights into enhancing cyber-attack resilience through cyber insurance, helping businesses make informed decisions regarding risk management.This research can impact industry policy by guiding the development of tailored insurance offerings.Originality/value: The article fills a gap in the literature concerning the analysis of the relationship between cyber risk perception and the decisions of medium and large companies regarding the purchase of cyber insurance in the Polish market.It provides valuable insights for policymakers, insurance providers, and businesses looking to improve their cybersecurity practices and resilience to cyber threats.