Correcting for Reporting Delays in Cyber Incidents
This addresses a critical issue for the cyber insurance industry by providing more accurate incident data, though it is incremental as it builds on existing delay correction methods.
The paper tackles the problem of reporting delays in cyber incidents, which distort the true incident rates, by proposing an algorithm that models the distribution of these delays to correct reported counts, showing an increase in recent cyber events instead of a decline.
With an ever evolving cyber domain, delays in reporting incidents are a well-known problem in the cyber insurance industry. Addressing this problem is a requisite to obtaining the true picture of cyber incident rates and to model it appropriately. The proposed algorithm addresses this problem by creating a model of the distribution of reporting delays and using the model to correct reported incident counts to account for the expected proportion of incidents that have occurred but not yet been reported. In particular, this correction shows an increase in the number of cyber events in recent months rather than the decline suggested by reported counts.