A research team claims a new cyber insurance model improves power grid reliability by 40% during coordinated cyberattacks. The model uses Shapley game theory to price risk across interconnected grid operators, tested on the IEEE RTS-GMLC benchmark system.
The timing matters. Cyber insurance claims fell 53% in the first half of 2025, suggesting the market is stabilizing after years of unsustainable losses. Meanwhile, 71% of energy sector professionals report increased vulnerability to operational technology attacks, up from 64% in 2023. The April 2025 Nova Scotia Power ransomware attack affected 280,000 customers and demonstrated that even relatively simple attacks cause real disruptions.
Traditional cyber insurance fails at pricing grid risk because it treats each operator in isolation. Power grids are different: a breach at one utility can cascade through interconnected systems. During peak load or severe weather, a cyberattack that reduces generation availability can trigger grid-wide failures. The researchers' epidemic model simulates how attacks spread through SCADA systems and industrial controls.
The proposed insurance model divides grid operators into "transmission groups" and prices premiums based on each operator's contribution to systemic risk. According to the simulation, this approach incentivizes operators to improve security where it matters most for grid stability.
What's missing: real-world validation. The study uses a test system with assigned attack parameters and recovery times. Actual grid environments are messier. The insurance industry's fundamental challenge remains: a single widespread event such as a supply chain compromise or cloud outage could push the entire market into crisis, regardless of pricing models.
Better pricing doesn't eliminate risk, it transfers it. The question for CTOs and CIOs managing critical infrastructure is whether game theory models actually change operator behavior or simply redistribute who pays when systems fail. History suggests the latter is more common.
The research appears in an academic context. Commercial deployment would require insurers to trust shared data across competitors and regulators to mandate participation. Both are hard problems that mathematics alone cannot solve.