The life science industry has experienced large losses from product liability and insurers need to become ever more vigilant in understanding and underwriting these risk classes. This trend is underlined by Swiss Re's sigma publication, New frontiers for P&C insurers unlocked through advanced analaytics, which writes that "Defective products and faulty workmanship/maintenance account for more or less 60% of the value of all liability claims." It goes on to write that "there is also a trend towards more international liability claims, for example more claims involving European and Chinese companies in the US." (Page 12 of sigma under "Product liability")
Sigma experts point out that "regarding product liability, fragmented data and complex supply chains make it hard to generate insights. However, data from individual loss and recall documents can help fine-tune risk assessments and underwriting strategies."
Just one aspect of the challenge is highlighted by regulatory requirements that foster the existence of various data sources. These reflect different aspects of the life sciences companies such as: product portfolio, revenue, adverse events, research activities and law suits.
At Swiss Re we analyse these data sets to generate market insights and enable our clients to achieve superior risk selection. Leveraging these data sources allows our clients to get insights into different risk dimensions of a life science company, for example; critical substances in the product portfolio, warning letters being issued by the authorities or label changes that have been recently released.
The main question that clients ask is how can they efficiently leverage these data sets in their daily underwriting process?
The answer comes in the form of the Swiss Re life science insights tool, that reduces the manual work needed to draw valuable conclusions. It does this by automatically extracting the relevant data, linking the data across different databases and displaying it in a customisable way to generate tangible insights for underwriters.
The life science tool provides underwriters with the relevant information spread across multiple databases with just a click of the mouse and enables them to investigate the risk via various drill-down functionalities. As a result the underwriting assessment for a life science company reduces from many days to just a few hours.