LifeScienceRisk’s Gill: Life sciences insurers must be “forward-thinking” to enable prototype development
Life sciences underwriters must support the development of clients’ prototypical products by applying rates commensurate with the revenues they could generate, LifeScienceRisk’s Catherine Gill has said.
The MGU’s recently appointed CEO spoke to The Insurer TV about the challenges and opportunities in the life sciences insurance market, and shared insights about what the industry is doing to best support its clients.
The insurance industry has a fundamental role in supporting innovation in this sector by enabling its clients to take risks, especially when it comes to the development of prototypes.
But to be able to price these risks, insurers must work closely with their clients to understand how such products will fare in the market.
“As underwriters in the life sciences insurance market, we have to be forward-thinking,” Gill said.
She added: “If we are understanding the product characteristics, it can aid in developing nuanced rates to apply to revenues from the sale of such prototypical products.”
LifeScienceRisk, part of Ryan Specialty Underwriting Managers, underwrites product and related professional liability coverages for companies in the life sciences industry.
Its clients are involved in the development, manufacturing and distribution of pharmaceuticals, medical devices, biotechnology products and natural health and nutritional supplements.
Speaking of opportunities in the sector, Gill noted how underwriters in this line of business are constantly assessing their aggregations and limits, and therefore there is constant fluctuation of capacity across specific segments or individual accounts.
“This natural ebb and flow of capital management creates opportunity for participation in insurance towers,” she said.
Other opportunities for carriers in this line of business could arise from the need for further risk transfer solutions as a result of spin-off activity, or the purchase of additional limits in the high inflationary environment.
Turning negatives into positives
The pharmaceutical industry has seen an uptick in demand for pharmacovigilance, which is defined as the science and activities connected to the detection, assessment, understanding and prevention of adverse effects or any other medicine-related problem.
This has arisen as a result of the proliferation of lifestyle-related diseases, increased drug consumption and drug development rates, rising rates of adverse reactions and elevated consumer awareness, Gill noted.
There has also been an effort within the pharmaceutical industry to minimise the presence of impurities in products because they could provoke unintended consequences for the end user.
But these challenges could provide opportunities for insurers to step in and offer solutions that aim to incentivise the optimisation of such products.
“From an underwriting and product liability perspective, the increase in pharmacovigilance and the attention to product impurities have had an impact on how underwriters view risk. These kinds of risk management activities ultimately aim to improve patient safety and reduce drug side effects and adverse outcomes,” Gill concluded.
During this six-minute interview, Gill discusses:
- The key themes in the life sciences insurance market
- How global supply chain issues have affected the sector
- How underwriters should embrace innovation in this sector
- Further opportunities for insurers in this sector