A game theory approach to cyber-insurance pricing could help power grid operators avoid insolvency when cyberattacks hit, according to academic research published this week.
The proposed model uses Shapley values (fair risk allocation from game theory) to price mutual insurance among transmission generators in smart grids. The research addresses a specific gap: traditional cyber insurance struggles with critical infrastructure's small insured pools and large, unpredictable claim fluctuations.
This matters because power grids face compounding risks. Cyberattacks now intersect with climate stressors like heatwaves, creating hybrid vulnerabilities that standard underwriting can't easily price. The Global Risks Report 2026 ranks "disruptions to critical infrastructure" surprisingly low (23rd) despite cyber and weather risks topping the list, suggesting a disconnect between perceived and actual exposure.
What's changing in cyber insurance
The broader market is evolving. Pricing stabilized in 2026, with enterprises demonstrating strong controls seeing lower premiums. Underwriters now emphasize integrated risk management: claims data, incident response metrics, and telemetry feeding back into underwriting decisions.
Industry requirements are hardening around specific controls. Phishing-resistant MFA, zero trust architecture, EDR/XDR deployment, and quarterly-tested business continuity plans are becoming standard underwriting criteria. Business interruption drives the highest ransomware claims, explaining why disaster recovery testing frequency now affects premiums.
For power grid operators, these standard requirements don't address sector-specific risks. A regional grid outage has cascading economic impacts beyond a single entity's balance sheet, making mutual insurance models worth watching.
The skeptical view
Some question whether insurance solves the right problem. Systemic events (widespread ransomware campaigns) can harden markets regardless of pricing stabilization, driven more by macroeconomic factors than incidents. Proactive underwriting tools like telemetry help, but create new governance and privacy challenges when improperly integrated.
The research assumes mutual insurance participants will share data and coordinate, which runs counter to competitive dynamics in deregulated power markets. Implementation remains theoretical.
History suggests critical infrastructure cyber-insurance will mature slowly. Until then, resilience investment matters more than premium optimization.