Supply chain disruption as one of many areas of concern, opportunity for technology and life sciences clients.
A recent survey of TechAssure’s insurance agent and broker members underscores how the COVID-19 pandemic has shaped their technology and life sciences clients’ approach to key business challenges and risks.
“Technology and life sciences companies are pioneers in innovations and have helped the world adapt since the onset of the pandemic,” said Veronica Somarriba, EVP, Technology Segment, North American Commercial Insurance. “In doing so, many of these companies have seamlessly changed the way they operate, potentially creating unintentional new risks and exposures in the process. As these companies continue to evolve, it’s critical that they have a good understanding of any new exposures and ways to properly manage them.”
“Our members are dedicated to helping technology and life sciences clients balance property and casualty insurance risk with business reward,” says Christine Kallivokas, Executive Director of TechAssure. “Their deep expertise in these industries enables them to effectively build robust risk mitigation programs to ensure that sufficient insurance coverages and limits are in place so clients can focus on being innovative and productive.”
When COVID-19 emerged, technology and life sciences companies had to navigate unprecedented change and disruption, shifting daily operations to meet new needs. According to the survey, 39 per cent of insurance agents and brokers say their clients have increased supply chain diversity because of COVID-19, with 48 per cent reporting that their clients plan to increase the diversity of their supply chains but haven’t yet.
Supply chain disruption is only one of the business concerns on technology and life sciences companies’ radars. The insurance agents and brokers surveyed report that their clients are “very” or “somewhat” concerned about a variety of business challenges, including but not limited to:
- Supply chain shortages: 93 per cent per cent
- Emerging regulations impacting their industry and associated compliance requirements: 86 per cent (up from 83 per cent in 2019)
- Privacy and data protection: 86 per cent (up from 83 per cent in 2019)
- An increasingly litigious environment: 81 per cent (up from 67 per cent in 2019)
The survey data reveals that for some technology and life sciences companies, COVID-19 served as a catalyst for positive developments as well, leading to new products and services and business growth. More than half of respondents (58 per cent) say COVID-19 led their clients to innovate new products/services they didn’t previously offer. Furthermore, nearly a third (31 per cent) of respondents say the pandemic created new opportunities for their clients to do business in domestic (U.S.) markets, and over a quarter (28 per cent) say the same for international markets. Beyond geographic expansion, some technology and life sciences companies are considering business growth via merger and acquisition (M&A) activity: 40 per cent of respondents say that their clients are considering an acquisition over the next year (up from 30 per cent in 2019).
The survey highlights that as their operations and exposures change, it’s essential for technology and life sciences companies to work with their insurance agent or broker to update their risk management and insurance coverages and limits as needed. According to the data, 45 per cent of respondents say their clients already have adjusted insurance policies and coverages to respond to business challenges (up from 25 per cent in 2019), while 48 per cent say they are in conversation with their clients about how to adjust insurance policies and coverages (down from 51 per cent in 2019).
