In the ever-evolving landscape of cybersecurity, identity posture has emerged as a crucial metric influencing the cost and assessment of cyber insurance in 2026. As cyber threats become more sophisticated, with one in three attacks involving compromised employee credentials, insurers and regulators are prioritizing robust identity management as a key factor in underwriting decisions.
Understanding the Shift to Identity-Centric Risk Assessment
The global average cost of a data breach had soared to $4.4 million by 2025, compelling many organizations to seek cyber insurance as a financial safeguard. In the United Kingdom, the uptake of cyber insurance increased from 37% in 2023 to 45% in 2025. However, the surge in claims has led insurers to revisit and tighten their underwriting criteria.
Credential compromise remains one of the most effective methods for attackers to infiltrate systems, escalate privileges, and maintain persistence. Insurers recognize that strong identity controls can mitigate the risk of a single account breach leading to widespread disruption, thus supporting more sustainable underwriting practices.
Key Identity Security Measures Valued by Insurers
Despite the rise of multi-factor authentication (MFA) and passwordless technologies, passwords continue to play a pivotal role in authentication processes. Organizations must address behaviors that heighten the risk of credential theft, such as password reuse, legacy authentication protocols, and dormant accounts.
Privileged access management is another critical aspect. Accounts with high-level access are often over-permissioned, creating significant risk. Insurers focus on how these accounts are managed, particularly regarding the use of MFA and logging. Tools like Specops Password Auditor can help organizations identify and rectify over-privileged accounts, thereby reducing potential vulnerabilities.
The Importance of Comprehensive MFA Coverage
While many organizations claim to deploy MFA, its effectiveness is contingent upon consistent enforcement across all crucial systems. Notably, the City of Hamilton’s experience illustrates the consequences of inadequate MFA implementation, where a lack of full coverage led to the denial of an $18 million insurance claim following a ransomware attack.
Insurers are increasingly mandating MFA for all privileged accounts, as well as for email and remote access. Failure to implement comprehensive MFA can result in higher insurance premiums.
Enhancing Your Organization’s Identity Cyber Score
Organizations can take several steps to bolster their identity security, which is increasingly scrutinized by insurers. These include eliminating weak and shared passwords, ensuring pervasive MFA deployment, reducing permanent privileged access, and regularly reviewing user access permissions.
By demonstrating active management and improvement of identity controls, organizations can align themselves with insurer expectations, potentially securing more favorable insurance terms. Engaging with experts or utilizing tools such as Specops Password Auditor can provide valuable insights and support in this endeavor.
As the cyber threat landscape continues to change, maintaining a strong identity posture will be vital for organizations seeking to minimize risk and optimize their insurance strategies.
