COMPUTATION OF PREMIUM FOR CLOUD INSURANCE UNDER THE POISSON MODEL

Cloud services are now indispensable to operate businesses run educational institutions manage finances and even for governance of nations. Although cloud has simplified extremely complex operations, with additional comfort arises the need of extra caution. Both the consumer of the cloud and the Cloud Service Provider (CSP) are vulnerable to threats such as cloud outages, hacking, cyber thefts and disruptions in internet access. As a result, resorting to insurance to protect their financial status is a natural solution. The insurer on the other hand has to cleverly decide the premium to be charged particularly when he sells a policy to the CSP in order to prevent any capital erosion as claims can be massive in magnitude. In this paper, we consider various premium principles that can be adopted by the cloud insurer to decide an accurate premium depending on the situation at hand. We then utilize theseprinciplesto determine the premium for an insurer who assumes the celebrated Poisson model for outages.