Due to China’s involvement in United States’ cybercrime, which costs U.S. businesses an estimated $100 billion per year, cyber expert Fred Tsai has proposed a mutual $2 billion insurance fund to relieve financial losses resulting from external cyber-attacks. A need for a comprehensive strategy against cybercrime involving the U.S. and China began when Presidents Jinping and Obama launched a joint effort to combat cybercrime for commercial gain. Fred Tsai suggests that the two countries build on this joint effort by each contributing $1 billion to a shared insurance fund in which private organizations can file claims and receive compensation from the fund when cyber-related financial losses occur from an outside country. Both U.S. and Chinese organizations can draw from this fund following an external cyber-attack.
It should also be noted that the U.S. cyber insurance market is currently about $2.75 billion in premiums written, and predicted to reach $20 billion in the next 10 years, so this cyber fund would be relatively short-lived. When the $2 billion investment runs dry, Tsai explains that the fund would be “replenished through premiums, which would increase for the country found to be the source of an attack.” While this idea is certainly a long-shot, innovative approaches to combat cybercrime should be welcomed by the public sector.