Scientific breeding techniques may be reshaping the future of equine bloodlines, but insurers aren't budging on how they value the result. As embryo transfer and intracytoplasmic sperm injection (ICSI) become more common in elite bloodstock circles, DUAL North America executive vice president of Bloodstock & Equine Jason Collier (pictured) said coverage won’t follow the science uphill.
“We will only insure foals for two to three times paid stud fee,” Collier said. “What the insured is willing to invest into the breeding process is their choice, but we will only provide coverage for two to three times the paid stud fee.”
The surge in biotech breeding has brought new scrutiny to how policies handle risk related to genetic manipulation. The concern isn't just about valuation – it’s about the unknowns that come with forcing biology’s hand. “They’re trying to genetically control the outcome of breeding. And just like any human or animal embryo, there’s potential for unforeseen mutations.” he said.
Collier pointed out that these potential genetic mutations already fall under existing exclusions. “We have exclusions for genetic defects. And those would technically be considered pre-existing conditions,” he said. The use of ICSI, where a single sperm is injected directly into an egg under microscopic guidance, introduces a degree of intervention that insurers see as inherently risky. “It is the insured’s choice to pursue this route, but they need to understand the inherent risks.” he said.
From a coverage standpoint, valuations are locked in early. “Purchase price, whether privately or at public auction, is the insurable value. When these horses get to be a yearling, a two-year-old, or older and start competing, that is when we will consider a higher value based on performance.” said Collier. However, he warned that genetically influenced pedigrees could artificially inflate prices – and insurers will be watching. “We’re going to have to be cognizant if prices get inflated because of these genetically enhanced pedigrees and be able to justify higher values.”
While science races ahead, insurance remains grounded in risk fundamentals. And for now, Collier said mortality coverage is unaffected by these biotech trends – though the same can't be said for broader property-casualty exposures.
“That’s really a farm and ranch liability aspect, not a mortality aspect,” he said. If negligence in a biotech procedure leads to an incident, exclusions are already in place. “If something that they’re doing on the farm would end up causing… a mortality loss, we would be able to exclude that due to negligence, or inadequate care for the animal.”
Insurers are drawing a clear distinction between core mortality policies and ancillary liabilities. “It doesn’t today affect the mortality – not saying it won’t in the future – but it’s something to keep an eye on,” Collier said.
Another strain point for the sector is the widening gap between veterinary inflation and coverage caps. The major medical limit at DUAL stands firm at $15,000, a figure Collier said is not going up anytime soon.
“This is not going to go as far as it used to, but we have no intention of increasing the limits for major medical as they stand today,” he said.
Policyholders often assume this coverage should apply to everyday injuries, but that was never the intent. “The major medical product truly was meant to be for major medical conditions, not just nicks and bumps and sniffles,” Collier said.
Insureds are expected to understand and manage their own spending within that limit. “They have up to a $15,000 bucket of coverage. And they can spend it as they see fit, within the coverage limits and sub-limits for specific treatments,” he said.
Underwriting evolves – slowly – toward data-driven models
While underwriting in equine insurance has traditionally leaned heavily on purchase values, gut feel and horse-world experience, the industry is slowly shifting toward data-driven models. That transition is being led by younger talent with stronger analytics fluency.
“The good news is a lot of the younger talent… are learning more about data-driven analytics in college now,” Collier said. “It’s easier to teach them that.” The challenge isn’t the technology; it’s the subject matter. “It’s more of a matter of just teaching them the specifics of equine.”
Formal actuarial training is still rare, but data tools are gaining ground. “We’re all starting to use more technology and more data-driven [tools]… to collect data and analyze our book performance,” he said. Platforms like Power BI have made it easier to bring near real-time insights into play.
Even so, the business remains uniquely experience-based. “While there are many colleges offering equine related courses, they do not provide courses in equine insurance,” Collier said. “Having that equine background makes it easier for people to learn it than it does for someone that has never really had any equine experience.”
Asked about broader tech shifts, Collier said data analytics is having a more immediate impact than AI, even if its potential looms.
“I don’t know about AI because I don’t think we fully understand its full potential ,” he said. Still, remote monitoring and data science are already reshaping book analysis and decision-making. “With things like Power BI, [we can] analyze the book… and give you more up-to-date, real-time data.”
For now, insurers are watching and waiting. “Who knows where AI is going to go in the next six months, let alone three years?” Collier said. The use case may not yet be clear, but the industry isn’t ruling it out.
