Structural models for fog computing based internet of things architectures with insurance and risk management applications

Abstract

Cybersecurity risk modeling and pricing are becoming a spotlight in actuarial science and operational research. This paper pertains to the analysis of the cybersecurity risks involved in the fog computing technology which has been intensively deployed in assorted Internet of Things (IoT) applications. To this end, a class of structural models are established to study the inherent cyber risk propagation process. Under the smart home applications, we manage to compute the compromise probabilities of individual nodes explicitly. Applications of the proposed structural models in the context of cyber insurance pricing are thoroughly explored. Finally, we propose an interval method for estimating the compromise probabilities of fog network’s elements, which can be used to efficiently identify weak nodes for cybersecurity risk management.