Dingchen Ning
Title
M.A.
Last Name
Ning
First name
Dingchen
Email
dingchen.ning@unisg.ch
Phone
+41 71 224 7994
15 results
Now showing 1 - 10 of 15
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Item type:Publication, Selection and screening in cyber insurance markets(2025-09-01)This paper examines the interaction between demand-side selection and supply-side screening in the U.S. cyber insurance market, leveraging novel data from a major insurance broker. I document two stages of selection: firms with higher cyber risk are more likely both to engage a broker and to purchase insurance. Insurers primarily manage risk by capping coverage rather than differentiating prices, and use survey-based screening that is only weakly correlated with underlying risk. Market-level evidence from a tax reform using a difference-in-differences approach supports the presence of adverse selection. A theoretical framework with asymmetric information, financial frictions, and market power rationalizes these findings.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Information asymmetry and insurance brokers(2024-10-07)We study the role of brokers in addressing information asymmetry in selection markets. Using detailed risk and insurance data from a large broker in the cyber insurance market, we present empirical evidence supporting the presence of selection and moral hazard based on independent cybersecurity ratings and actual cyber incident records of firms with and without insurance over time. We also find that clients who have worked with the broker longer, thus allowing the broker to collect more information, exhibit significantly less ex-ante moral hazard compared to new clients, though there is less evidence of reduced selection bias. In a model, we show that the empirical pattern can be rationalized when the broker is premium-maximizing and insurers have partial information.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Information asymmetry and insurance brokers(2024-08-23)We study the role of brokers in addressing information asymmetry in selection markets. Using detailed risk and insurance data from a large broker in the cyber insurance market, we present empirical evidence supporting the presence of selection and moral hazard based on independent cybersecurity ratings and actual cyber incident records of firms with and without insurance over time. We also find that clients who have worked with the broker longer, thus allowing the broker to collect more information, exhibit significantly less ex-ante moral hazard compared to new clients, though there is less evidence of reduced selection bias. In a model, we show that the empirical pattern can be rationalized when the broker is premium-maximizing and insurers have partial information.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Information asymmetry and insurance brokers(2024-09-30)We study the role of brokers in addressing information asymmetry in selection markets. Using detailed risk and insurance data from a large broker in the cyber insurance market, we present empirical evidence supporting the presence of selection and moral hazard based on independent cybersecurity ratings and actual cyber incident records of firms with and without insurance over time. We also find that clients who have worked with the broker longer, thus allowing the broker to collect more information, exhibit significantly less ex-ante moral hazard compared to new clients, though there is less evidence of reduced selection bias. In a model, we show that the empirical pattern can be rationalized when the broker is premium-maximizing and insurers have partial information.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The supply of cyber risk insurance(2024-08-29); ; Cyber risk losses are large and growing, yet the cyber insurance market is small. What constraints the insurance industry from providing larger capacity for cyber risk? We argue that while heavy tails and uncertain loss distribution of cyber risk require significant amounts of external contingent capital, the asymmetric information embedded in insuring cyber risk makes external capital prohibitively costly. Hence, risk financing of cyber insurers relies significantly on the internal capital which constraints its supply. We model the cyber insurance risk financing and then test our arguments empirically in the context of the US cyber insurance market. Using an exogenous shock of the non-US affiliated reinsurance tax treatment in 2017, we establish the causal inference that insurers primarily rely on the internal capital market to supply cyber risk insurance. Then, we test which of the features of cyber risk contribute to the cost of external capital and confirm that all of them play a significant role.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The supply of cyber risk insurance(2024-05-17); ; Cyber risk losses are large and growing, yet the cyber insurance market is small. What constraints the insurance industry from providing larger capacity for cyber risk? We argue that cyber risk is special in that it combines heavy tails, uncertain loss distribution, and asymmetric information. We model the implications of these risk features for risk financing and then test them empirically in the context of the US cyber insurance market. Using an exogenous shock of the non-US affiliated reinsurance tax treatment in 2017, we establish the causal inference that insurers primarily rely on the internal capital market to supply cyber risk insurance. Then, we test which of the features of cyber risk contribute to the cost of external capital and confirm that all of them play a significant role.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The supply of cyber risk insurance(2023-09-19); ; Cyber risk insurance has been introduced for more than two decades in the United States, yet the insurance market for cyber risk is tiny amounting to 1% ($6.5 billion) of premiums in the U.S. property-casualty insurance market in 2021. In this paper, we analyze what constrains the insurance industry from providing larger capacity. We argue that cyber risk is special in that it is both information-intensive to underwrite and heavy-tailed. It leads to the tension between the need to raise large amounts of external capital to finance heavy-tailed risks and the high compensation demanded by capital providers due to information frictions. Hence, the suppliers are large insurance groups with a deep internal capital market, and their capacity is constrained. We start by providing empirical evidence that the cyber risk insurance market is dominated by large insurance groups and that, compared to other types of insurance, cyber insurance relies heavily on the groups' internal capital market. Then, using an exogenous shock on the tax treatment of the non-U.S. affiliated reinsurance in 2017, we establish the causal inference that insurers primarily rely on the internal capital market to supply cyber risk insurance.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The supply of cyber risk insurance(2023-09-30); ; Cyber risk insurance has been introduced for more than two decades in the United States, yet the insurance market for cyber risk is tiny amounting to 1% ($6.5 billion) of premiums in the U.S. property-casualty insurance market in 2021. In this paper, we analyze what constrains the insurance industry from providing larger capacity. We argue that cyber risk is special in that it is both information-intensive to underwrite and heavy-tailed. It leads to the tension between the need to raise large amounts of external capital to finance heavy-tailed risks and the high compensation demanded by capital providers due to information frictions. Hence, the suppliers are large insurance groups with a deep internal capital market, and their capacity is constrained. We start by providing empirical evidence that the cyber risk insurance market is dominated by large insurance groups and that, compared to other types of insurance, cyber insurance relies heavily on the groups' internal capital market. Then, using an exogenous shock on the tax treatment of the non-U.S. affiliated reinsurance in 2017, we establish the causal inference that insurers primarily rely on the internal capital market to supply cyber risk insurance.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The supply of cyber risk insurance(2023-08-09); ; Cyber risk insurance has been introduced for more than two decades in the United States, yet the insurance market for cyber risk is tiny amounting to 1% ($6.5 billion) of premiums in the U.S. property-casualty insurance market in 2021. In this paper, we analyze what constrains the insurance industry from providing larger capacity. We argue that cyber risk is special in that it is both information-intensive to underwrite and heavy-tailed. It leads to the tension between the need to raise large amounts of external capital to finance heavy-tailed risks and the high compensation demanded by capital providers due to information frictions. Hence, the suppliers are large insurance groups with a deep internal capital market, and their capacity is constrained. We start by providing empirical evidence that the cyber risk insurance market is dominated by large insurance groups and that, compared to other types of insurance, cyber insurance relies heavily on the groups’ internal capital market. Then, using an exogenous shock on the tax treatment of the non-U.S. affiliated reinsurance in 2017, we establish the causal inference that insurers primarily rely on the internal capital market to supply cyber risk insurance.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, The changing landscape of cyber risk: An empirical analysis of frequency, severity and tail dynamics(2023-12-18); ; Rustam IbragimovCyber risk has become a major theme in information security research. Yet relatively little is known about its statistical features and how it evolves over time. This paper utilizes three cyber databases to examine the empirical properties of cyber risk. We first deal with report delays with an extended two-stage model and then identify structural changes in the frequency and severity of different cyber risk categories. We document that for malicious events the frequency has grown exponentially in the past two decades and the financial loss distribution has shifted toward greater severity since 2018. The increasing trends for other categories are slower in frequency and less clear in severity. We also explore the tail dynamics and find that the heavy-tailedness of cyber risk is persistent. Finally, we discuss the implications of the documented empirical features and show that they lead to lower insurance demand and potentially higher risk levels for firms.Type:conference paper