Identity Cyber Scores are emerging as a critical metric that cyber insurers use to evaluate organizational identity security posture and determine coverage eligibility and pricing in 2026. As cyber-attacks increasingly target employee accounts—with one in three incidents involving compromised credentials—insurers are shifting from broad risk assessments to granular identity-focused evaluations. This fundamental change in how cyber insurance is underwritten means organizations must now prioritize identity security controls to secure favorable insurance terms and protect against rising breach costs.
The cyber insurance market is experiencing rapid growth, projected to reach $22.5 billion by 2026, driven by escalating cybercrime threats and the rising costs of data breaches. The global average cost of a data breach hit $4.4 million in 2025, making cyber insurance increasingly essential for organizations of all sizes. However, as the market expands, insurers are tightening underwriting standards and focusing on identity security as a core requirement for coverage.
Understanding Identity Cyber Scores
Identity Cyber Scores represent a standardized metric that cyber insurers use to evaluate an organization's identity security posture. These scores assess multiple dimensions of identity risk, including compromised credentials, weak password practices, insufficient multi-factor authentication (MFA) implementation, and poor privileged access management. Rather than evaluating cybersecuri
The emergence of Identity Cyber Scores reflects a critical insight in cybersecurity: identity compromise is the gateway to most successful attacks. As the Delinea Security Team notes, "Identity security has become a cornerstone of cyber insurability. Insurers increasingly recognize that identity compromise is the gateway to most successful attacks." This recognition has prompted a fundamental shift in how insurers assess risk and determine which organizations qualify for coverage.
Identity Cyber Scores evaluate several key factors that directly impact an organization's security posture:
- Multi-factor authentication (MFA) coverage across critical systems and remote access points
- Elimination of weak passwords and enforcement of strong password policies
- Removal of dormant or unused accounts that pose security risks
- Elimination of shared credentials that cannot be properly audited
- Regular access reviews and privilege audits
- Implementation of least privilege principles
- Privileged access management (PAM) controls for administrative accounts
Organizations that demonstrate strong identity controls across these dimensions receive better insurance terms, lower premiums, and broader coverage. Conversely, organizations with weak identity security posture face higher premiums, coverage limitations, or potential denial of coverage altogether.
The Role of Identity Compromise in Cyber-Attacks
The focus on identity security in cyber insurance reflects the reality of modern cyber-attacks. One in three cyber-attacks involve compromised employee accounts, making identity compromise one of the most common attack vectors. Attackers prioritize identity compromise because it provides legitimate access to organizational systems, allowing them to move laterally, escalate privileges, and maintain persistence without triggering many traditional security alerts.
When an attacker gains access to an employee account, they can:
- Access sensitive data and intellectual property
- Move laterally through the network to reach critical systems
- Escalate privileges to gain administrative access
- Establish persistence mechanisms for long-term access
- Exfiltrate data or deploy ransomware
- Impersonate the employee for social engineering attacks
Because identity compromise is so prevalent and damaging, cyber insurers now view identity security as a primary risk factor. Organizations that fail to implement robust identity controls are seen as high-risk, regardless of their other security investments.
Impact on Cyber Insurance Pricing and Coverage
Identity Cyber Scores directly influence cyber insurance pricing, coverage limits, and eligibility decisions. Insurers use these scores to segment organizations into risk tiers, with each tier receiving different premium rates and coverage terms.
Organizations with strong Identity Cyber Scores benefit from:
- Lower insurance premiums reflecting reduced risk
- Broader coverage limits and fewer exclusions
- Faster claims processing and better claims support
- Access to preferred underwriting terms
- Eligibility for specialized coverage options
Organizations with weak Identity Cyber Scores face:
- Higher insurance premiums
- Lower coverage limits
- Specific exclusions related to identity-based breaches
- Mandatory remediation requirements before coverage is approved
- Potential denial of coverage
This tiered approach incentivizes organizations to invest in identity security controls. Rather than paying higher premiums due to weak identity posture, organizations can improve their scores by implementing recommended controls and reducing their insurance costs.
Key Identity Security Requirements for 2026
Cyber insurers have established specific identity security requirements that organizations must meet to qualify for favorable coverage terms in 2026. These requirements focus on practical, implementable controls that significantly reduce identity-related breach risk.
Multi-Factor Authentication (MFA) Requirements
MFA is now a baseline requirement for cyber insurance coverage. Insurers require comprehensive MFA implementation across:
- All privileged and administrative accounts
- Remote access systems and VPNs
- Email and collaboration platforms
- Critical business applications
- Cloud infrastructure and services
Organizations that fail to implement MFA across these critical paths face higher premiums and potential coverage gaps. MFA is considered non-negotiable because it significantly reduces the risk of account compromise, even when passwords are weak or stolen.
Privileged Access Management (PAM)
Privileged access management has become a core requirement for cyber insurance eligibility. Insurers expect organizations to:
- Implement PAM solutions that control and monitor privileged account access
- Reduce the number of permanent privileged accounts
- Implement just-in-time privilege elevation
- Maintain detailed audit logs of all privileged access
- Regularly review and revoke unnecessary privileges
PAM controls are critical because compromised privileged accounts pose the greatest risk to organizations. A single compromised administrator account can provide attackers with complete system access.
Credential and Account Hygiene
Insurers require organizations to maintain strong credential and account hygiene practices:
- Eliminate weak passwords and enforce strong password policies
- Remove dormant accounts that are no longer in use
- Eliminate shared credentials that cannot be properly audited
- Implement regular access reviews to identify and remove unnecessary access
- Maintain an inventory of all user accounts and their access rights
These practices may seem basic, but many organizations struggle with account hygiene. Dormant accounts and shared credentials are common security risks that attackers exploit.
The Growing Cyber Insurance Market
The cyber insurance market is experiencing significant growth as organizations recognize the financial impact of cyber-attacks. The market is projected to reach $22.5 billion by 2026, up from smaller figures in previous years. This growth is driven by several factors:
- Rising frequency and severity of cyber-attacks
- Increasing regulatory requirements for data protection
- Growing awareness of cyber risk among business leaders
- Rising costs of data breaches and recovery
- Expansion of cyber insurance offerings and coverage options
The $4.4 million average cost of a data breach in 2025 has made cyber insurance a business necessity rather than a luxury. Organizations that experience a breach without insurance face catastrophic financial consequences, including direct costs, regulatory fines, legal liability, and reputational damage.
Cyber insurance adoption is also increasing. In the UK, 45% of organizations had cyber insurance coverage in 2025, up from 37% in 2023. This trend is expected to continue as more organizations recognize the importance of cyber insurance and as regulatory requirements increasingly mandate coverage.
How Organizations Can Improve Their Identity Cyber Scores
Organizations looking to improve their Identity Cyber Scores and secure better cyber insurance terms should focus on implementing the following improvements:
- Deploy Multi-Factor Authentication: Implement MFA across all critical systems, starting with privileged accounts and remote access. Prioritize MFA for email, VPNs, and cloud services.
- Implement Privileged Access Management: Deploy a PAM solution to control and monitor privileged account access. Reduce the number of permanent privileged accounts and implement just-in-time privilege elevation.
- Conduct Account Audits: Identify and remove dormant accounts, eliminate shared credentials, and document all user access rights. Implement regular access reviews to maintain account hygiene.
- Enforce Strong Password Policies: Implement password complexity requirements, regular password changes, and password managers to reduce weak password risks.
- Implement Identity Monitoring: Deploy tools to detect suspicious account activity, unauthorized access attempts, and credential compromise. Respond quickly to detected threats.
- Provide Identity Security Training: Educate employees about phishing, social engineering, and credential security. Train administrators on secure privilege management practices.
- Document Security Controls: Maintain detailed documentation of all identity security controls, audit logs, and compliance activities. This documentation supports insurance underwriting and claims.
- Engage with Insurers: Work with cyber insurance providers to understand their specific requirements and scoring criteria. Many insurers provide guidance on improving scores.
Future Implications and Trends
Identity Cyber Scores represent a broader trend toward more granular, risk-based cyber insurance underwriting. As the cyber insurance market matures, we can expect:
- Continued focus on identity security as a core underwriting criterion
- Development of more sophisticated scoring methodologies
- Integration of threat intelligence and breach data into scoring models
- Increased emphasis on continuous monitoring and real-time risk assessment
- Greater alignment between cyber insurance requirements and regulatory compliance standards
- Expansion of identity-focused coverage options and specialized policies
Organizations that proactively improve their identity security posture will be best positioned to secure favorable cyber insurance terms and protect against identity-based attacks. Those that delay addressing identity security risks will face higher insurance costs and increased breach risk.
The Bottom Line
Identity Cyber Scores are reshaping the cyber insurance landscape in 2026, making identity security a primary factor in coverage decisions and premium pricing. With one in three cyber-attacks involving compromised employee accounts and average breach costs reaching $4.4 million, insurers are rightfully prioritizing identity security in their underwriting processes.
Organizations must recognize that cyber insurance is no longer a one-size-fits-all product. Instead, insurers are using Identity Cyber Scores to differentiate risk and price accordingly. Organizations with strong identity security controls will secure better insurance terms and lower premiums, while those with weak identity posture will face higher costs and coverage limitations.
The path forward is clear: organizations must invest in identity security controls, including MFA, privileged access management, and account hygiene practices. These investments not only improve cyber insurance terms but also significantly reduce the risk of successful cyber-attacks. In an era where identity compromise is the gateway to most successful attacks, identity security is not optional—it is essential.
