Does Cyber Insurance Mitigate Market Reactions to Cyber Breaches? Evidence from Form 8-K Filings
Wenqi Xin · Aaltodoc (Aalto University) · 2026
This study examines whether cyber insurance influences stock market reactions to cybersecurity breach disclosures. Specifically, the analysis focuses on cybersecurity incidents disclosed by U.S. listed firms through Form 8-K filings, which provide a relatively standardized regulatory disclosure setting. Using an event study framework and cross-sectional regressions, the study examines whether cumulative abnormal returns vary with disclosed cyber insurance coverage. The results show that firms with disclosed cyber insurance experience less negative short-window cumulative abnormal returns and more favorable post-announcement abnormal returns. Importantly, this pattern is robust to matching-based tests, alternative specifications, alternative event windows, and bootstrap estimation. These findings are consistent with signalling theory and suggest that cyber insurance may serve as an observable signal of firms’ cybersecurity preparedness and breach response capability. The study contributes to the cybersecurity disclosure and event-study literature by showing that disclosed cyber insurance is associated with cross-firm variation in market reactions to breach disclosures.