Life sciences insurance is entering a period of structural adjustment. As digital health platforms, AI-driven diagnostics and hybrid service-product models reshape healthcare delivery, traditional underwriting categories built around pharmaceuticals and medical devices are being tested.
For Kirsten Shastri (pictured), head of life sciences at Tokio Marine Kiln, the shift reflects a broader evolution within the market, one driven less by isolated crises and more by sustained scientific acceleration.
“A good example of something that created a standalone market would be the opioid epidemic,” she said, recalling how life sciences emerged from liability and healthcare lines. Like cyber insurance a decade ago, the class developed in response to real-world events. Today, however, innovation itself is the catalyst.
When Shastri joined TMK three and a half years ago to establish its life sciences team, the sector was still largely framed around tangible pharmaceutical and medical device risk. Now it spans laboratories, supplements, telemedicine platforms and wearable technologies.
Shastri describes life sciences as insuring “products and services that benefit a human life”, a broad remit that reflects how healthcare businesses now operate. “It’s a niche field in insurance,” she said, “but it’s a broad field when you look at it in the world.”
The COVID-19 pandemic accelerated that expansion, intensifying global investment and regulatory focus. As a result, underwriting models designed for clearly defined product risks are increasingly encountering blended exposures.
“I don’t think we can apply legacy underwriting models to the risks we see at hand,” Shastri said. “Traditional models looking at traditional pharmaceutical drugs and traditional tangible medical devices don’t necessarily work for the new things that we’re seeing.”
Telemedicine illustrates the complexity. A consultation delivered through an app carries professional indemnity, product liability, cyber exposure and regulatory considerations simultaneously.
“There are many moving parts and many different types of risks that you have to analyse that don’t traditionally fit one bracket,” she said. “There are no one size fits all actuarial models you can correctly use to model a risk.”
Where actuarial precedent is limited, underwriting becomes more consultative. Engagement with clients replaces reliance on historical loss patterns. In response, the insurer developed a telemedicine product intended to address those overlapping exposures within a single framework.
The challenge is also visible in emerging sectors such as femhealth. In research conducted by TMK, 76% of founders reported barriers to securing insurance, 42% felt their risks were not properly understood, and 39% encountered a lack of underwriting appetite.
“That is concerning,” Shastri said. “If [femtech founders] don’t have the right cover, they can’t scale to commercialisation and they cannot launch their product into the market.”
Risk in life sciences evolves as businesses scale. From early-stage concept to commercial launch, regulatory requirements shift, product design develops and distribution strategies expand.
“From what the idea was to what the commercialised product is can be a journey,” Shastri said. “We have to follow them on the journey and explain the journey from day one to the day of launch.”
This evolution is taking place alongside a generational transition within the insurance market. “People are leaving the market and younger people are coming in, which is amazing,” she said. “We need to make sure there are no knowledge gaps between the leaving generation and the generation entering the market.”
For Shastri, the adjustment required is not tactical but structural. “There can’t be silos anymore in life sciences,” she said, pointing to how digital health and AI blur traditional risk boundaries.
As health innovation continues to accelerate, underwriting models will need to evolve with it. The future of life sciences insurance, she suggests, lies in holistic thinking, long-term commitment and a willingness to move beyond categories that no longer reflect how modern healthcare businesses function.
