Managing Physical Layer Security in Wireless Cellular Networks: A Cyber Insurance Approach

The fifth-generation (5G) wireless networks are expected to provision value-added services with ubiquitous coverage, which makes data security unprecedentedly critical. In this context, physical layer security has emerged as a promising solution to safeguard data transmission by exploiting characteristics of the wireless medium. Despite the recent technological advance in physical layer security and wireless transmission, secrecy outages (i.e., data breaches) and service outages (i.e., connection failures) will inevitably happen and incur financial losses. This economical consequence is a fact that is mostly overlooked by the existing literature. To provide financial protection against secrecy outage and service outage, we introduce a cyber-insurance framework for wireless users in cellular networks, where each user pays a premium to an insurer for a future financial compensation if an outage occurs to him/her. In particular, we derive the network risks of the cellular users in terms of secrecy outage probability and service outage probability as well as the financial risk of the cyber insurer in terms of the ruin probability that indicates the chance that the insurer experiences a deficit in affording the losses of outage users. Through numerical evaluation, we demonstrate the impact of network performance on the financial risk of the insurer. The numerical results also show that the ruin probability of the insurer can be effectively reduced by equipping a larger number of antennas at the base stations or increasing network frequency reuse.