Reducing Risk and Insurance Premiums through Zero Trust and Microsegmentation

By John C. Fay, MBE

Executive Summary

The landscape of cyber risk is changing. No longer simply a technical concern, cybersecurity is now recognised by boards and underwriters alike as a defining factor in corporate resilience, financial exposure, and operational continuity.

As cyber insurance becomes both more expensive and more selective, insurers have begun rewarding organisations that adopt mature security architectures. In particular, businesses that embrace frameworks such as Zero Trust and controls like Multi-Factor Authentication (MFA) and microsegmentation are seeing reductions in premiums, improved policy terms, and enhanced insurability.

This paper explores how organisations can align their cybersecurity posture with insurer expectations to unlock financial value. It demonstrates how a strategic investment in the Zero Networks SaaS platform—available in the UK through XypherSecurity—not only improves security outcomes, but also delivers measurable return on investment (ROI) and long-term cost savings.

The Evolving Role of Cyber Insurance

The cyber insurance market has undergone a significant recalibration. Premiums have increased sharply in recent years, particularly in response to the growing volume and severity of ransomware attacks. In the UK, premium rises of over 60 per cent were recorded in 2023 alone. Yet, amid this volatility, a new trend has emerged: organisations demonstrating proactive cyber hygiene are being rewarded.

Insurers are increasingly moving away from generalised risk models and now assess organisations based on specific controls, architectural decisions, and their ability to detect, contain, and recover from incidents. In this context, cybersecurity maturity is no longer a secondary consideration; it has become a prerequisite for effective risk transfer.

What Insurers Now Look For

A number of controls are now considered essential in the underwriting process. Organisations that cannot evidence these are often met with higher premiums, limited coverage, or, in some cases, refusal of cover altogether.

One of the most fundamental controls is Multi-Factor Authentication. Once viewed as a best practice, MFA is now widely expected as standard. It is especially critical for remote access, administrative accounts, and cloud environments. Microsoft estimates that MFA blocks over 99 per cent of credential-based attacks, and its implementation is a clear indicator to insurers that an organisation takes basic identity hygiene seriously.

Zero Trust Architecture has also become a focal point. Based on the principle of continuous verification and least privilege access, Zero Trust ensures that trust is never assumed. According to IBM’s 2023 data breach study, organisations with mature Zero Trust implementations recorded an average reduction of £1.4 million in breach-related costs compared to their less prepared peers.

Microsegmentation, though sometimes overlooked in strategic planning, is of equal importance. By restricting lateral movement within the network, it significantly limits the spread of threats should a breach occur. While insurers may not yet quantify microsegmentation directly in pricing models, its presence often supports stronger coverage and reduced exclusions.

Penetration Testing as Validation, Not Formality

Penetration testing has shifted from a compliance checkbox to a key evidential tool in the insurance dialogue. Insurers now look beyond whether a test has occurred; they assess its frequency, scope, and follow-up actions.

External and internal testing should take place at least annually, with more frequent assessments recommended for organisations in regulated sectors. Insurers value clear remediation evidence, showing that issues identified in past tests have been addressed. Organisations that demonstrate a cycle of testing, fixing, and validating are viewed far more favourably than those treating tests as occasional formalities.

 Strategic Investment through XypherSecurity and Zero Networks

Zero Networks, offered in the UK by XypherSecurity, is a SaaS platform designed to enforce Zero Trust principles through automated microsegmentation and adaptive access control. It enables organisations to implement security best practices without the complexity or overhead traditionally associated with such frameworks.

Deployment is entirely agentless and requires no hardware appliances, making it highly scalable and operationally lightweight. Within 30 days, the platform learns legitimate network behaviour and applies host-based firewall rules that block all but essential connections. Administrative ports are locked by default and can only be opened temporarily via MFA. This ensures a consistently low attack surface and near-instant containment in the event of compromise.

The result is a system that not only delivers on the promises of Zero Trust and segmentation but does so without significant configuration burden or the need for additional security staff.

Demonstrating Return on Investment

In one recent deployment facilitated by XypherSecurity for a UK-based financial firm with approximately 1,000 endpoints, the benefits were quantifiable within the first year.

The organisation reported a reduction in its cyber insurance premium of 18.6 per cent. Its average time to detect threats fell from 32 days to just nine, and its containment time dropped from 19 days to five. Furthermore, its annual penetration test pass rate rose from 61 to 93 per cent. Based on these improvements and associated cost reductions in breach recovery, the platform paid for itself within five months.

Such results are not anomalies. They reflect a growing consensus that investments in mature security controls are not simply risk mitigators, they are financially prudent decisions.

Total Cost of Ownership over Three Years

Beyond short-term ROI, the long-term total cost of ownership (TCO) presents a compelling case for adoption. Based on industry benchmarks and publicly available data, the following analysis illustrates expected savings over a three-year horizon.

Cost Category	Prior to Zero Networks	After Zero Networks	Three-Year Saving
Cyber insurance premiums	£426,000	£346,800	£79,200
Incident response and recovery	£720,000	£255,000	£465,000
Penetration testing	£108,000	£72,000	£36,000
Redundant point security tools	£180,000	£90,000	£90,000
Cybersecurity staff (FTE equivalent)	£450,000	£330,000	£120,000
Total (3 Years)	£1,884,000	£1,093,800	£790,200 (41.9%)

The platform’s ability to replace or reduce the need for VPNs, network access control, and firewall management significantly lowers tooling costs and streamlines operations. Staff time previously spent tuning access controls or responding to alerts can be reallocated to strategic functions. The figures above are grounded in data from IBM, Forrester, CREST, and UK salary surveys, ensuring conservative and credible projections.

Conclusion

Cybersecurity is no longer an operational matter reserved for IT. It is a business risk with direct implications for financial planning, regulatory exposure, and insurance costs. As insurers become more selective, and attackers more sophisticated, the most successful organisations will be those that treat security as a strategic investment.

Platforms such as Zero Networks, when implemented through trusted UK partners like XypherSecurity, offer a clear pathway to risk reduction, compliance, and financial advantage. By aligning with insurers’ expectations—while simultaneously reducing operational burden—organisations can realise both resilience and return.

In this new era, it is not enough to hope that insurance will carry the burden. Risk must be actively managed, demonstrably reduced, and strategically transformed into long-term value.

References

1. IBM Security (2023)

   
   

   Cost of a Data Breach Report 2023

2. Marsh McLennan (2023

   
   

   Global Insurance Market Index – Q3 2023 (Cyber)

3. Forrester Consulting (2023)

   
   

   The Total Economic Impact™ of Zero Trust Solutions

4. Microsoft Security Blog (2023)

   
   

   The Impact of MFA: Blocking 99.2% of Identity Attacks

5. CREST UK (2023)

   
   

   Penetration Testing Guide and Cost Estimations

6. Robert Half UK (2024)

   
   

   Cyber Security and Technology Salary Guide

7. Zero Networks (2024)

   
   

   Platform Capabilities, Case Studies and White Papers

8. UK National Cyber Security Centre (NCSC)

   
   

   Zero Trust Architecture Principles and Segmentation Guidance

9. Aon Cyber Solutions (2023)

   
   

   The Role of Controls in Underwriting Cyber Risk