Cyber Insurance Readiness: The IT Controls Underwriters Demand

The Insurance-Security Feedback Loop

Cyber insurance has become a forcing function for IT security investment across UK businesses. In a 2025 survey by the UK government’s Department for Science, Innovation and Technology, 74% of organisations reported increasing their cybersecurity spending, with insurance requirements cited as a primary driver alongside regulatory obligations and board-level risk awareness.

This creates a feedback loop. Underwriters raise the bar for what controls they require. Organisations invest in those controls to obtain or renew coverage. Claim data improves. Underwriters refine their requirements further. The result is that cyber insurance questionnaires have become, in effect, a de facto security standard that sits alongside formal frameworks like Cyber Essentials and ISO 27001.

For London financial services firms, where cyber insurance is often mandated by clients, counterparties, or regulatory expectation, the ability to satisfy underwriter requirements efficiently is a practical business necessity.

What Underwriters Are Looking for in 2026

The cyber insurance market has matured considerably since the chaotic pricing environment of 2022-2023. Underwriters now use structured questionnaires and, increasingly, external scanning tools to assess applicants’ security posture before quoting.

The controls that determine whether you get coverage, and at what price, are remarkably consistent across the major underwriters.

MFA is non-negotiable. Every major cyber insurance policy now requires multi-factor authentication on email, remote access, administrative accounts, and cloud services. This is the single control that most directly influences both policy availability and pricing. Underwriters have learned from claims data that compromised credentials without MFA are the root cause of the majority of business email compromise and ransomware incidents.

Endpoint detection and response has replaced antivirus. Traditional signature-based antivirus is no longer considered adequate protection for policy purposes. Underwriters expect EDR solutions that provide behavioural detection, automated containment, and forensic telemetry. This shift reflects the reality that modern threats evade signature-based detection routinely.

Backup integrity is tested, not assumed. Ransomware claims have taught underwriters that backups only matter if they work when needed. Policies now require evidence of regular backup testing, offsite or immutable copies, and documented recovery time capabilities. The question is no longer “do you have backups?” but “when did you last prove you can restore from them?”

Patch management cadence is measured. Underwriters assess how quickly your organisation applies critical security updates. Firms that can demonstrate consistent patching within 14 days of release receive better terms than those with 30-day or longer cycles. Unpatched known vulnerabilities that lead to a breach are increasingly treated as a basis for claim denial.

The Cost of Getting It Wrong

The average UK SME cyber insurance premium reached approximately £3,715 per year in 2025, according to industry data. However, premiums for financial services firms typically run 30-50% higher due to the sensitivity of data handled and the regulatory environment.

More concerning than premium costs is the risk of coverage gaps. Firms that cannot demonstrate required controls may face policy exclusions, reduced coverage limits, or outright decline. In the event of a claim, warranty breaches related to security controls can void coverage entirely.

A London wealth management firm that suffers a ransomware attack and discovers its policy is void because MFA was not enforced on a cloud admin account faces not only the direct costs of the incident but the full weight of regulatory scrutiny, client notification obligations, and reputational damage without insurance to absorb the financial impact.

How Proper Managed IT Reduces Your Premiums

The controls underwriters require are not exotic security technologies. They are the components of a properly managed IT environment: MFA on every account, EDR on every endpoint, patched systems, tested backups, and documented procedures.

This is precisely what a competent managed IT provider delivers as part of standard service. The difference between a firm that pays premium rates for limited coverage and one that receives competitive quotes with comprehensive terms is often nothing more than the quality of their IT management.

At Nerdster, every managed services client receives the controls that underwriters demand as part of their service agreement. MFA is enforced across all accounts from day one. EDR is deployed on every endpoint. Backups are tested monthly with documented results. Patching follows a 14-day cycle for critical updates. Incident response procedures are documented and reviewed quarterly.

When renewal time comes, we complete the technical sections of your insurance questionnaire, compile evidence packs demonstrating control implementation, and provide the documentation your broker needs to negotiate competitive terms. Our clients consistently report premium reductions of 15-25% after their first full year of managed services, because the underwriter evidence tells a clear story of a well-managed environment.

If your current IT arrangement cannot produce the evidence your insurer is asking for, that is a problem worth solving before your next renewal.