Cyber insurers are tightening requirements, raising premiums, and demanding proof that organizations can prevent credential misuse and contain lateral movement. In 2025, Privileged Access Management (PAM) has become one of the most decisive factors in whether a business can secure or renew a cyber insurance policy. This post explains why underwriters now focus on identity security, especially privileged access, and how PAM helps organizations meet these expectations.
The economics behind this are simple. Industry reports indicate ransomware strikes every eight minutes, and nearly half of all cyber insurance claims stem from compromised credentials or misused privileged access. Insurers are paying out millions while absorbing liability from GDPR, CCPA, and emerging AI regulations.
Companies without mature identity or network protections often face premiums two to three times higher, or outright denial of coverage. Underwriters want assurance that organizations can both prevent and contain credential-based breaches. That’s why identity security and privileged access have become a primary focus for insurers evaluating risk and determining policy premiums.
Why Underwriters Focus on Identity Security
Insurers are zeroing in on identity security, especially privileged access management. Privileged access is the common denominator in most claims. Attackers don’t need to “break in” when stolen credentials let them walk through the front door. That’s why applications now ask:
- Can you prove human and non-human accounts follow least privilege?
- Do you manage privileged accounts with dedicated tooling?
- Is MFA enforced for remote and third-party access?
- Do you have safeguards in place for high-risk remote administrative tools, such as RDP and SSH?
In the past, password managers were a key requirement for insurers, but they only store credentials. They don’t control how privileges are assigned, used, or monitored. Today, insurers expect systems that secure credentials, enforce least privilege, track elevated activity, and block lateral movement once attackers gain entry.
Containment: The New Requirement
Identity Access Management (IAM) solutions determine who gets access; segmentation determines how far that access can go. Underwriters increasingly ask about microsegmentation, east–west traffic controls, and workload isolation. They want confidence that if one system is compromised, the incident won’t cascade across the environment. Together, identity and segmentation reduce the financial impact of a breach – exactly what insurers care about most.
How Privileged Access Management Helps
PAM has become a core underwriting requirement because it directly addresses credential risk. It’s now the top differentiator influencing insurability.
Here’s how PAM helps:
- Enforce Least Privilege & Just-in-Time Access – No standing admin accounts; elevated access is issued only when needed, with oversight.
- Secure Human & Machine Identities – Modern infrastructures run on service accounts, API tokens, and automated processes—many of which are unmanaged. PAM brings these identities under central control, rotates secrets automatically, and reduces the risk of hard-coded or reused credentials.
- Strengthen Remote & Vendor Access – With PAM you can enforce MFA before privileged remote sessions such as RDP or SSH sessions, gate and monitor every elevated connection, apply policies to contractors, vendors, and third-parties, and eliminate risks associated with shared accounts.
- Deliver Proof of Compliance – Underwriters want verifiable proof of controls and to know systems can be audited if there is a breach. PAM delivers session logs, recordings, and detailed activity trails that give underwriters confidence the organization can verify what privileged users did and when.
- Support Zero-Trust Principles – PAM solutions fit naturally into zero-trust frameworks by continuously validating identity, limiting access, and shrinking the attack surface. Together this improves an organization’s insurance profile.
- Contain Lateral Movement – The next-generation of PAM vendors now include microsegmentation capabilities, making it easier for companies to isolate systems and contain lateral movement to reduce attack surfaces. This added security layer helps lower insurance premiums.
Preparing for the Underwriting Process
Today’s cyber insurance applications resemble full IT audits. Underwriters dig into identity governance, privileged access, segmentation, monitoring, and incident response. If you can’t demonstrate control, monitoring, and containment of privileged access, it’s time to evaluate PAM solutions that strengthen your IAM maturity and prove risk reduction.
Look for a PAM platform that protects privileged accounts, enforces least privilege, contains threats, and provides audit evidence without adding complexity. Agentless, unified solutions deploy quickly, integrate with existing IT stacks, and work across cloud, on-premises, and hybrid environments. If you’re comparing vendors, make sure you ask the right questions—we’ve compiled 12 questions to ask PAM Vendors.
Start early preparing for the underwriting process so you have time to address any ‘no’ answers, be transparent, as many underwriters act as advisors rather than adversaries; and always validate your controls, because listing a capability that isn’t truly in place can jeopardize approval—or even a future claim.
Where 12Port Fits In
12Port is a modern Zero Trust PAM Platform that combines enterprise PAM capabilities and microsegmentation in one, agentless platform, helping companies secure privileged identities and limit lateral movement without multiple tools. Companies can implement only the features they need and scale over time. This helps meet PAM requirements while reducing complexity and costs with a platform that can grow with you.
For organizations navigating evolving insurance requirements, this unified model makes it easier to demonstrate maturity, improve underwriting outcomes, and build a resilient security foundation.
Try 12Port PAM for Free or Book a demo with our experts.