The Problem
Power grid operators face a growing cyber insurance gap. Attacks on the power sector doubled between 2020 and 2022, but existing insurance products don't adequately cover operational technology compromises or load-altering attacks that can trigger cascading failures across the grid.
The challenge is structural: smart grid security depends on collective adherence to standards across multiple stakeholders, from equipment manufacturers to cloud service providers to grid operators. Traditional insurance incentivizes individual behavior. Grid resilience requires coordinated defense.
The Proposed Solution
Researchers have developed a cooperative game theory model that uses Shapley value calculations to determine how much each grid participant should contribute to a mutual insurance pool. The approach treats cyber risk as a shared problem requiring shared economic incentives.
The model attempts to account for supply chain vulnerabilities where third-party systems become attack vectors, and real-time data dependency risks where automated control manipulation can cause immediate damage.
The Reality Check
This is an academic framework, not a shipping product. The paper doesn't provide case studies of utilities actually implementing the model or insurers underwriting policies based on it.
Several uncertainties remain unaddressed. Blockchain's role in grid cybersecurity, despite significant research attention, remains unproven. Decentralized control systems promise security benefits but face unclear regulatory viability given strict critical infrastructure requirements.
The gap between information security experts and grid operators is substantial. Any practical insurance model must facilitate communication and shared risk assessment across traditionally siloed teams.
What This Means
The EU's Network Code on Cybersecurity and NERC CIP standards are creating compliance pressure that makes new risk management approaches worth exploring. Lloyd's of London scenario analyses have identified broad ranges of potential claims from coordinated grid attacks, highlighting complexity that traditional models struggle to address.
Whether game theory provides the answer is unclear. What's certain: the current approach isn't keeping pace with the threat landscape. Ukraine's 2015 BlackEnergy attack demonstrated that sophisticated actors can successfully disrupt critical infrastructure. The question isn't whether better models are needed. It's whether this one works in practice.
We'll see.