This article was created in partnership with QBE.
The world of life sciences has always been at the forefront of innovation – spurring on new discoveries, technologies and important clinical research to further societal growth and wellbeing. But with great feats comes great risks. The cost of claims for damage or injuries caused by pharmaceuticals, medical devices or clinical trials can be immense – making the case for insurance here even more important.
At QBE, their life sciences team is quick on adapting underwriting strategies to address emerging liability risks from these new innovations. Their mission, spearheaded by John Livatino, SVP, head of Healthcare Liability, and Lisa McCormack (pictured), VP, underwriting leader, Life Sciences, is to build a team with deep expertise – something that is needed in the current, fast-moving market.
“[At QBE], our strategy [revolves] around bringing in a qualified team together with deep knowledge and expertise in life sciences,” added McCormack. “We’ve been able to adapt by having people who’re in tune with the changes, the trends and the latest developments in the life science space.”
Speaking to IB, Livatino added that this specialized expertise is applied across all related healthcare liability sectors.
“There's a wide range of digital health that is being provided. We've also got expertise and talent that has been focused on that area,” he said. “Our miscellaneous medical product is crafted to include coverages that would shore up any grey areas be it from tech or bodily injury.”
This flexibility is key in addressing overlap between tech-driven services and traditional medical care. By launching a life sciences product within the healthcare liability business unit, QBE has the ability to borrow expertise from the miscellaneous medical underwriters too. Regulatory scrutiny, however, is something of a growing concern here especially around product recalls and compliance timelines.
“From a product recall perspective, it creates some challenges [in regards to] the new regulations,” added McCormack. “It could block the recall altogether or delay it… companies are then unsure of what the new regulations are and if their product actually qualifies for recall under the new standards.”
And delays in compliance can create broader ripple effects. “Timing is very important. The longer it takes for a product to get through the regulation process, the longer it takes for them to go to market which then creates other issues,” McCormack noted. “[At QBE], to address these challenges we have a medical expense coverage that we can offer and also product recall coverage. So those are ways we can help life sciences companies mitigate those regulatory challenges.”
Digital health blurs the lines between traditional medical practice and tech-enabled care delivery. According to Livatino, the nature of claims in digital health is often not vastly different - but the nuances matter.
“When you're talking about a digital health provider, the majority is failure to treat or failure to diagnose,” he said. “But we have also seen a media liability claim which we wouldn’t have expected in a traditional risk.”
QBE’s underwriting approach starts with a clear understanding of where a client fits in the digital ecosystem. “Are they just the doctor who’s doing a live video visit? Are they a tech company that has developed software? Or are they hosting a platform?” Livatino asked. “There’s a lot of iterations – and it could be a combination of these various parts.”
Here, the answer is to stay super flexible – throwing out the archaic ‘one-size-fits-all’ approach. “Providing the appropriate coverage is critical,” he said. “Having a form where you can build out the coverage specifically to that insured is important.”
He also stressed the role of risk segmentation. “There is vicarious liability, there is bodily injury, but there also is financial loss. It's about taking into account all of those exposures.”
Though QBE’s Life Sciences division is new, launched only recently, McCormack is already focused on anticipating long-tail claims.
“Life sciences companies carry an inherent risk because of the products and the patient population they’re servicing,” she explained. “Cosmetic procedures with lasers carry a very high-risk potential – same with cell and gene therapy – and we could have a whole podcast about CRISPR technologies.”
Even in the absence of historical claims, QBE is building policies based on predictive risk analysis. “We're going to manage those exposures the best we can,” added McCormack.
Growth-stage med tech and life sciences companies often face unique insurance needs, especially in the context of mergers and acquisitions. Here, Livatino emphasized QBE’s intentional approach to supporting scale.
“When we write a med tech or digital health company, some of them grow or are acquired,” he said. “One of the [main] things is flexibility in your provision for mergers and acquisitions. The same flexibility extends to exits.“
“Having a broader appetite, not having a small box, not being a vanilla risk underwriting company… our first inclination is not to say, well, you're going to need to get a separate policy. It's to say, okay, how can that risk fit within our policy?”
For QBE, underwriting for innovation means underwriting for uncertainty. Whether it’s regulatory lag, media liability in telehealth, or the unknown implications of CRISPR, the company’s approach centers on two pillars – talent and adaptability.
“We’ve built a team that understands these shifts,” said McCormack. “We’ve got the knowledge and we’ve got the product flexibility to support what’s coming.”
