Identity Cyber Scores: The Future of Cyber Insurance Metrics in 2026

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Cyber Insurance Underwriters Focus on Identity Posture

Cyber insurance underwriters are increasingly focusing on identity posture when assessing an organization’s risk profile. With the average cost of a data breach reaching $4.4 million in 2025, companies are seeking to demonstrate lower risk exposure and secure more favorable insurance terms. A key factor in this assessment is the organization’s identity-centric security controls.

Credential Compromise and Identity Security

Credential compromise remains a primary attack vector, allowing hackers to gain access, escalate privileges, and persist within an environment. Insurers view strong identity controls as essential in reducing the likelihood of widespread disruption or data loss. To evaluate an organization’s identity security, insurers examine several key areas.

Password Hygiene

Password hygiene is a critical aspect of identity security. Despite the growing use of multi-factor authentication and passwordless initiatives, passwords remain a key component of authentication. Organizations must pay close attention to password reuse, legacy authentication protocols, dormant accounts, and service accounts with never-expiring passwords. Regular audits of password hygiene and credential exposure help demonstrate an organization’s maturity and intent to reduce identity-driven risk.

Privileged Access Management

Privileged access management is another crucial measure of an organization’s ability to prevent lateral movement and privilege escalation. Insurers view poorly governed or unknown privileged access as higher risk than a small number of tightly controlled administrators. Security teams can use tools to identify stale, inactive, or over-privileged administrative accounts and prioritize remediation before those credentials are abused.

Multi-Factor Authentication (MFA) Coverage

Multi-factor authentication (MFA) coverage is also essential in reducing risk. While many organizations claim to have deployed MFA, it only meaningfully reduces risk when consistently enforced across all critical systems and accounts. Insurers increasingly require MFA for all privileged accounts, as well as for remote access. Organizations that neglect MFA may face higher premiums.

Improving Identity Cyber Score

To improve their identity cyber score, organizations can take several steps. Eliminating weak and shared passwords, applying MFA across all critical access paths, reducing permanent privileged access, and regularly reviewing and certifying access are all key areas of focus. Insurers expect organizations to demonstrate not only that identity controls exist but also that they are actively monitored and improved over time.

By prioritizing identity security and demonstrating a commitment to reducing identity-driven risk, organizations can improve their chances of securing more favorable cyber insurance terms. This requires a comprehensive approach to password hygiene, privileged access management, and MFA coverage, as well as regular audits and reviews to ensure controls are effective and up-to-date.