Life sciences insurers facing recruitment challenges

That is the view of Mark Appleton, liability underwriting director at HDI Gerling, who was speaking in a panel debate at Post's Impact Forum today (11 June) alongside Ace European Group life sciences underwriter Claire Wilkinson and CNA Insurance's head of life sciences Andrew Tamworth.

Appleton said his organisation had moved away from bringing people in-house towards using services on a contractor basis. 

"The challenge in the industry as a whole is keeping their knowledge current within our organisation when actually it is in private practise that a lot of the [fast-paced changes] are happening," he said.

All agreed that having a scientific background was essential to being able to properly price the risk, although Wilkinson said firms needed to broaden their definition of scientific background to ensure they had a breadth of expertise rather than simply knowledge in a narrow area.

Tamworth said the most important thing was to have "access to the full range of expertise within your organisation - that can be scientific, regulatory, recall knowledge, legal - it's very difficult to find all of those skills in one person".

Although there has tended to be a small specialist pool of carriers operating in this area, Tamforth said that that firms beyond the traditional players were starting to become tempted by the attractive returns.

He explained: "We are seeing more capacity coming to market particularly [managing general agents] using Lloyd's capital. You have some Lloyd's syndicates who quite like the returns you get in the pharmaceutical sector without having the expertise to do it. That has been a trend over the last couple of years."

Given the amount of attention that a botched clinical trial is likely to attract, it is important researchers have a disaster recovery plan which involves with insurers, the media and PR professional, Tamworth added.

"Nothing fills a vacuum like misinformation," he commented, citing the huge spotlight which fell on Parexel and Tegenero after the drug trial which left six young men with multiple organ failure.

Elsewhere, Appleton noted increasing number of pharmaceutical firms are setting up captives to manage their life sciences risks motivated by the desire to maintain control and manage costs.

"There is a vastly elevated rate of self-retention with big pharma and clinical trials," he said.

Wilkinson agreed but said the industry could do more to promote itself.

She said: "Sometimes as an external advisor you can point out things they might not necessarily have considered so there is definitely a role [for insurers] to play."