A smart city is one which connects households and various service providers (e.g., water, electricity, internet, IoT, and heating) to a multidimensional IT network where topological layers from each service share common nodes. A cyber attack or a contagion-like failure affecting such a network would result in nodes incurring various types of losses as the stressor spreads across the network. For an insurer of a smart city, it would be of paramount importance to realistically gauge the extent and manner of loss so that accurate pricing of products can be determined.
Researchers at Arizona State University have developed a simulation program for loss characterization in smart city networks. The inputs of the software are parameters which describe the nature of the smart city configuration as well as data relating to its geographic, infrastructural, and topological attributes. Assessment of loss distributions across the nodes (i.e., households and service providers) are featured. An insurance company can specify contagion probabilities across layers of multi-graph based on perceived riskiness of IT systems and operating conditions. The program outputs a loss distribution which forms the basis for a range of insurance prices.
• Operational risk assessment
• Insurance pricing
• Smart cities
• Network resiliency testing
Benefits and Advantages
• Accommodates various cost topologies, network sizes, and shapes
• Aids in risk management and quantification of dynamic critical systems