Understanding Stricter Underwriting in Cyber Insurance for UK Manufacturers

Published on 31/10/2025 by Oryx Align Ltd

The Rising Challenge of Cyber Insurance

Cyber insurance has evolved rapidly, transitioning from a niche offering to a sophisticated yet fragmented market. As claims surge, UK manufacturers are facing stricter underwriting standards that are reshaping how businesses approach risk management. Nathan Charles, Head of Customer Experience at cyber security specialist OryxAlign, provides insights on the shifting landscape, the implications of rising premiums, and strategies to bolster resilience.

Why UK Manufacturers Are Facing Stricter Premiums

The cyber insurance landscape is not uniform; costs differ across industries and depend significantly on an organization’s security posture. Companies still using outdated systems or legacy technology find themselves at the higher end of the premium spectrum. Conversely, manufacturers with modern security certifications access more favorable rates.

Stark Statistics

Recent findings revealed that half of UK businesses reported a cyber breach in 2024, with SMEs facing median premiums ranging between £11,500 and £55,000 depending on their coverage depth. High-profile incidents, such as last year’s M&S breach, have led insurers to brace for claims that could reach nine figures, resulting in overwhelming pressure on premium rates. While some reports indicated a decline in premiums towards the end of 2024, this was mainly due to pricing adjustments rather than a decrease in risk.

The Evolving Underwriting Environment

The underwriting landscape has significantly hardened. Insurers are no longer satisfied with basic tick-box application forms; renewal processes now require thorough audits, technical questionnaires, and documented security policies. Alarmingly, some businesses are even being denied coverage that they previously held.

Insurers’ Expectations: What You Need to Know

Rising premiums are indicative of the stringent checklist insurers now enforce. Key requirements for coverage include:

• Multi-Factor Authentication (MFA)
• Managed Endpoint Detection System
• Verified Backup Solutions
• Structured Incident Response Plans
• Regular Cyber Awareness Training

These elements have become baseline expectations. Companies that fail to meet these criteria may face increased premiums or invalidated policies. For instance, if MFA is not enforced, even a paid-up policy might be voided.

The Importance of Certification

Accreditations like Cyber Essentials Plus and ISO 27001 carry significant weight with insurers. Not only do they signify robust risk management frameworks, but they also validate that organizations employ solutions that meet high-security standards. Companies using niche or unrecognized tools face challenges, as they may meet technical requirements yet fall outside the insurer’s approved vendor list.

The Broader Implications Beyond Premiums

Manufacturers must understand that inadequate cybersecurity can have far-reaching consequences. A breach, particularly without the necessary safeguards, can trigger:

• Regulatory Scrutiny
• Reputational Damage
• Severe Penalties

Businesses are required to disclose data breaches to the Information Commissioner’s Office, which can lead to public fallout and potential legal actions from affected parties.

Increased Regulatory Burdens

The anticipated Cyber Security and Resilience Bill could impose stricter reporting timelines, potentially reducing initial disclosure to 24 hours and full reporting to 72 hours following an incident. Non-compliance may result in hefty daily fines, escalating to £100,000.

Furthermore, the UK government has instituted a ban on ransom payments by public bodies and critical infrastructure sectors, mandating that companies report to authorities before making any payments.

Rethinking Cyber Risk Strategies

The evolving nature of the insurance market has led some large organizations to consider self-insurance or holding capital reserves. However, most SMEs typically rely on cyber insurance as their primary financial protection, with a pressing need to meet insurers’ requirements.

A Layered Defense Approach

To effectively address these challenges, organizations must adopt a layered defense approach. Companies should:

• Maintain a thorough risk register.
• Invest in continuous improvements.
• Establish clear timelines for bolstering security measures.

Firms showcasing a roadmap for future enhancements are more likely to negotiate favorable premiums, making proactive planning essential.

The Future of Cyber Insurance in the UK

The UK cyber insurance market is expected to refine further, moving toward a more tiered system resembling traditional household or auto insurance. Businesses may encounter various coverage levels—each corresponding to specific security standards and certification requirements.

Until this structure takes hold, businesses will face more personalized negotiations shaped by their commitment to cyber resilience.

Conclusion: Navigating the Cyber Insurance Landscape

As UK manufacturers grapple with a sophisticated and demanding cyber insurance market, rising premiums are indicative not only of increased threat levels but also heightened standards set by regulators and insurers alike.

Organizations that regard cyber insurance as merely an expense are likely to struggle with securing sustainable coverage. In contrast, those integrating insurance into a broader strategy encompassing comprehensive controls, certifications, and risk management will be better positioned to safeguard both their financial health and corporate reputation.

For further insights on building your cyber resilience strategy, visit OryxAlign.

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