Tommorow’s Life Sciences

Life Sciences

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Life Sciences

We are living in an era of rapid scientific progress. It spans across multiple
disciplines and is changing not only the medicines available to patients,
but also entire healthcare systems, inclusive of researchers, clinicians,
payers, providers, regulatory agencies, and untold numbers of patients.
The revolution occurring in healthcare is forcing stakeholders across the
industry and all who benefit from healthcare to face a variety of questions:
What are the societal implications of these changes? How do they protect
health and improve the individual’s chance of cure? And how do they affect
the business environment for companies in life and health insurance and
the life sciences industry?
We believe that the magnitude and impact of these discoveries and the
current changes across healthcare are so significant that they cannot be
adequately captured by an isolated view. That is why Arthur D. Little and
Munich Re have combined their knowledge, as well as analytical skills,
and consolidated them into this joint Life Science Report.
Here we provide a compact and clearly structured overview of the
major trends in medicine and healthcare. This Life Science Report
provides insights, reveals impacts, and sets forth imperatives for
both the insurance and life sciences industries. The common goal:
to bring innovations to patients faster and to push the boundaries
of insurability.
The Life Science Report highlights some highly relevant global trends
and innovations that are already shaping the healthcare of tomorrow.
We hope that sharing our experiences and insights in this Report will
evoke your interest for further discussion. We invite you to reach out
to share your view with us and to shape the future of health together.

Dr. Ulrica Sehlstedt

Anke Idstein

Managing Partner

Chief Executive Life & Health Munich

Global Practice Leader

Continental Europe

Healthcare & Life Sciences

(w/o Iberia, Italy, Malta) and Israel

Arthur D. Little

Munich Re

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EXECUTIVE SUMMARY
Aging populations, changing urban and work
environments, technical innovations in data processing
and analysis, and current advances in diagnosing and
treating diseases will not only dramatically transform
healthcare but also our way of living. This will have
impacts, both positive and negative, on the life sciences
and insurance industries, as it is their purpose to provide
solutions that prevent and mitigate current and future
risks.
The COVID-19 pandemic has demonstrated how
developments in multiple areas of medicine and
society, as well as ways of living and working, can
accelerate dramatically under pressure. As such,
medical technologies, digitization of the healthcare
system, and telehealth have made significant progress
in the last two years. Home care solutions for elderly or
chronic disease patients are on the rise, incorporating
digital and medical technologies.
This fosters an ongoing decentralization of the patient
journey that can provide a higher quality of care,
potentially improving quality-of-life and patientcentered outcomes. Decentralization and a rise in home
care solutions are necessary and likely beneficial for the
aging patient population worldwide. By 2060, twice as
many people in the EU will be 65 years or older as those
younger than 15 years, and the proportion of very old
people will triple. We are seeing these aforementioned
changes now. But novel developments in the area of life
sciences are on the horizon and will need to be analyzed,
understood, and evaluated for their impact.

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ARTHUR D. LITTLE

For this Report, our team has defined five focus topics
that reflect the latest developments in the healthcare
space that impact players in life sciences as well as in
insurance.
Digital health is our starting point and the title of
our first chapter. It illustrates tangibly how data and
digital technologies will change the patient journey
and open the opportunity space for innovative digital
health solutions that insurance and healthcare players
can learn from. The second chapter looks at new and
advanced treatments like immunotherapies, gene
therapy, and cell-based therapeutics, and is followed
by a chapter about new ways to analyze large-scale
biologic data including genomics, as it is a major
research field for the development of diagnostics
and therapeutics.
Another highly relevant healthcare area that has gained
pace and therefore its deserved attention in recent
years, especially during the pandemic, is mental health.
In an expert interview, world-renowned depression
expert Prof. Dr. Dr. Florian Holsboer and Dr. Alban Senn,
Chief Medical Officer at Munich Re, discuss current
challenges and future solutions in this field. And finally,
we explore what is next after COVID-19, what is the
threat of the next pandemic, and how life sciences
players and insurers could and should prepare to
support a more resilient healthcare ecosystem.

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1.

D I G I TA L H E A LT H

I NS IG HTS

By nature, the healthcare and life sciences

Digital health thus far has been used in

based on scientifically proven numbers and

different contexts, primarily in reference to
devices, technologies, and developments in
the healthcare system that are related to

industry is data-driven, with business success
figures. With digital tools, such as electronic
health records (EHRs), remote patient monitoring,
or virtual clinical trials management, data

digitization and electronic systems.

volume and complexity increase constantly.

For the purpose of this Report, digital health

can access the full medical history of patients

is the incorporation of digital technology tools

including information on test results, treatment

and methods into healthcare to interact and

record, allergies, demographics, and so on. Digital

treat patients in a better or more efficient way

tools simplify coordination among different

than before and thus improve outcomes.

providers, such as involved physicians or hospitals

The digital health field has gained traction
in recent years with the increasing maturity
of technologies and capabilities around data
gathering and analysis. Projections show that
in 2025 the digital health services market may
grow to a financial volume of nearly US $660
billion.1 The field was further fueled by the
effects of the COVID-19 pandemic on society
as person-to-person contact was temporarily
restricted and willingly avoided. While prior to

Through connected EHRs, medical professionals

and insurance providers — as long as future
regulation allows insurers to use information
from EHRs. This improved coordination can
reduce redundancies in therapy and diagnostics
and increase time efficiency by providing all
necessary information to every professional in
every therapeutic configuration. Patients can
receive their intervention earlier, medication and
treatment errors are reduced, and the standard of
care increases through greater continuity.

COVID-19, healthcare professionals from the US,

In combination with other digital tools and

Europe, and Japan rated the use of telemedicine

technologies, EHRs can also be integrated into

at 57% across all medical fields, this increased

a larger digital network of services, such as for

to 73% in 2021. 2

disease monitoring. Together, these tools can

Digital health is rapidly integrating into the
medical field and will transform it. In a 2019
survey with respondents primarily in the US and

provide on-demand test results, subsequently set
up necessary appointments, or send reminders for
regular checkups, vaccinations, or screenings.

Europe, 68% of healthcare professionals stated
that their company had a digital strategy or was
working on one. In 2021 this number increased to
81%, emphasizing the speed at which the digital
transformation has picked up recently. 3

1
2
3

6

“Projected Global Digital Health Market Size from 2019 to 2025.” Statista, accessed September 2022.
“Digital Health in Immunology — Thematic Research.” GlobalData, 10 December 2021.
“Digital Transformation and Emerging Technology in the Healthcare Industry — 2021 Edition.” GlobalData, 30 November 2021.

ARTHUR D. LITTLE

All these digital health tools, services, and

Technology alone, however, is not sufficient

devices can help facilitate the patient-centered

to drive the digital health transformation.

journey through the healthcare system to

Digital health solutions have the potential to

support innovation and find solutions for the

contribute to measurable improvements in

most pressing healthcare problems. For patients,

longevity or morbidity but improving a hard

ubiquity and linkage of digital health signifies an

endpoint such as survival simply by adding a

increased incorporation of various technologies

single technology to the patient journey seems

across their medical experience, rather than

overly optimistic.

an isolated usage of a single selected digital
application for a certain point in time.

Essentially, a digital solution such as a health

A patient’s journey can largely be divided into

specific stage (e.g., severe forms) for a selected

five steps: prevention, diagnosis, treatment

patient group (e.g., certain age groups). This is

induction, treatment maintenance, and

a similar approach to pharmaceuticals, which

monitoring. Each aspect can be closely tied with

are usually tested and introduced in selected

various digital services, tools, and devices (see

patient populations.

app is often targeted to a specific disease in a

Figure 1).

However, in contrast to pharmaceuticals that

Incorporating technology across the various steps

usually aim at reducing mortality or morbidity

of the patient journey generates vast amounts

(e.g., reducing hospitalizations), a growing number

of connected data, which subsequently can be

of health apps aim for the improvement of health

interpreted using current and ever-improving

status, patient engagement, adherence, and

capabilities. Such volumes of data and the

quality of life, which are so-called soft endpoints

possibility to integrate different data sources in

for studies. It is so far unknown whether they

the analysis present powerful tools, as they can be

become ineffective over time or if their adherence

used by different stakeholders to further enhance

by users is long lasting.4 But these aspects

the five steps of the patient journey.

are crucial for becoming a valuable tool for
comprehensive disease treatments and being

This will, however, require a clear ecosystem

cost-effective in the long term. Several studies

approach with some form of a digital hub
that allows for safe and compliant collection,
processing, analysis, and data sharing across
key ecosystem stakeholders (doctors, patients,
payers, hospitals, research institutes, drug

have already shown a beneficial impact in the field
of mental health5 (e.g., improving symptoms of
anxiety or even preventing depression)6 and are
now in practical use.

developers, etc.) as well as enabling the
adoption of new technologies (e.g., artificial
intelligence [AI]/machine learning [ML]).

Figure 1. Digital and data integration into the patient journey

Figure 1. Digital and data integration into the patient journey
Selected technology examples
Prevention

Wearables to
encourage lifestyle
changes and monitor
physical activity, sleep,
biomarkers

Diagnosis

Treatment
induction

Diagnostic tools

for early patient
identification, enhanced
with natural language
processing

AI/ML-based
diagnostic tools for
patient stratification
and treatment
patterns mining

Data from wearables

(biomarkers) and EHR
(medical history) to
support early diagnosis

Digital education
tools to increase
engagement

Treatment
maintenance

Digitally connected
tools and apps
to increase patient
adherence

Behavioral analytics
to help track disease
progression

Social patient
engagement
platforms for patientpatient and patientphysician interaction

Monitoring

Digital diaries to
monitor flare-ups
and side effects

Sensor-based
metabolic monitors
(e.g., in toilets)

Source: Arthur D. Little

4
5
6

Kernebeck, Sven, et al. “Adherence to Digital Health Interventions: Definitions, Methods, and Open Questions.” Bundesgesundheitsblatt,
Vol. 64, 2021.
Ebenfeld, Lara, et al. “Evaluating a Hybrid Web-Based Training Program for Panic Disorder and Agoraphobia: Randomized Controlled Trial.”
Journal of Medical Internet Research, Vol. 23, No. 3, 2021.
Buntrock, Claudia, et al. “Effect of a Web-Based Guided Self-Help Intervention for Prevention of Major Depression in Adults with Subthreshold
Depression: A Randomized Clinical Trial.” JAMA, Vol. 315, No. 17, 2016.

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In addition, clear regulations regarding data
privacy and use are essential. The more
homogenous these regulations are across
geographies, the more rapidly players will
enter the market to provide solutions.
That being said, it is expected that significant
differences will remain among key markets,
especially the North American and European
markets. The American market in particular is

IMPACT
The incorporation of digital health into the
patient journey and the subsequent possibility
of data extraction and analysis will impact
various stakeholders in the pharmaceutical
field, including:

more open to the use of personal health data,

well as the added transparency and availability

Health Insurance Portability and Accountability

of information. And, with the increased ability

Act (HIPAA), which set limitations. While

to self-manage and monitor their disease

companies will continually push for increased
regulatory agencies will be forced to balance
those requests with patients’ legitimate privacy

remote delivery of care through virtual
platforms (e.g., telemedicine or mHealth) as

even as there are clear regulations, such as the

sharing and use of data across all geographies,

Patients. Patients will benefit from the

together with healthcare providers, they will

and ethical concerns (for more information, see

also feel more empowered.
Healthcare providers. Ultimately, data will
have to be augmented with the right clinical
decision support tools across the whole

sidebars “Right to be forgotten” and “What is

patient journey, enabling providers to become

data ethics?”).

more efficient and reducing some of the
barriers between providers and patients. This

Right to be forgotten

will not only be an opportunity to concentrate

European institutions are currently

informed and engaged patient dialogue

more on the patient, but also to have a more

developing “the right to be forgotten”

supported by much improved visualization

(RTBF), which describes a person’s right to
ask organizations to provide information
on gathered personal data and delete it
upon request. This RTBF also concerns the

algorithms and preferences among physicians

health insurance focuses on cancer patients,

and regulatory bodies. Consequently, drug

and aims at disregarding any information

developers need to monitor data prior to

on cancer, its treatment, or sequelae after

and after the launch of their drugs. During

a certain amount of time. This would impair

the clinical development, digital solutions

risk-adequate, evidence-based underwriting,

(e.g., data analytics in clinical trial design,

as some cancer types carry a long-term

decentralized clinical trials with remote

excess mortality risk, even decades after

patient monitoring, digital biomarkers) are

successful treatment. Moreover, other

leveraged for a faster time-to-market with

diseases such as chronic hepatitis are

should prepare for widespread application
of RTBF, optimizing fair, risk-adequate, and
evidence-based ratings in the time frame
not affected by RTBF.

data that are being generated by technology
time data/evidence) can affect treatment

on underwriting processes. RTBF in life and

countries. Recent underwriting guidelines

Life sciences companies. The large sets of
use (as a result of a growing need for real-

insurance business, with significant impact

currently qualifying for RTBF in certain

of the data and the disease status.

enriched clinical data.
Medtech companies. The integration,
interchangeability, and monitoring of data as
part of medtech solutions will be critical and
must be based on a better understanding of
how digital health and medtech solutions will
interact and ultimately improve outcomes.

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ARTHUR D. LITTLE

Regulators. As the field matures, an increasing
number of digital health solutions will be put
forth for regulatory approval. At the same time,
integration and acceptance of technological
tools in clinical development will require
regulators to review the large volumes of data
those tools generated. In addition, safety and
data privacy and security must be addressed

from a regulatory perspective.
Insurers. A major part of the insurance
business is based on an accurate risk

IMP E RATIVE S FOR
H EALTH CARE & LIFE
SCIENCES P LAYE RS
Digital technologies are sweeping the
healthcare and life sciences field, which requires
their adoption into the player’s existing services,
platforms, and processes. This can be achieved
largely through a five-step approach:
1. Looking inside. Adapting to the new digital

assessment. The use of AI- or ML-supported

environment is key. To do so, organizations

models based on relevant insured data could

must assess their current standing and find

improve risk prediction in underwriting by

out which digital skills, tools, and processes

finding novel or more relevant parameters

are already present and integrated.

beyond traditional and population-oriented
evidence-based methods from traditional
medical knowledge. These new models rely on
structured and standardized data, which must
be formed and delivered by insurers to fully
harness the potential of this technology.
First models currently are being developed
to either simplify and accelerate the
underwriting process with ML methods,
asking only for the minimum necessary
information to achieve an adequate risk
assessment, or to improve risk prediction
by using novel AI-supported models within
large data pools extended also by thirdparty data. It remains to be seen whether,
with limited applicant information going
into the underwriting process, a superior risk
prediction is possible beyond conventional
actuarial and insurance medicine methods.
Whether these new approaches in
underwriting can replace existing methods
will be clarified over the coming years.
Beyond improving prediction, this technology

2. Assessing potential. Analyzing the potential
improvements and benefits of digital health
and the pain points that will be addressed
by these solutions is an important step in
identifying the right vision for a specific
organization or player.
3. Looking outside. Players must understand
which digital trends will shape the market in
the future and establish a proactive rather
than reactive position to respond to coming
disruptions.
4. Analyzing the gap. With the understanding of
internal capabilities and prediction of the future
landscape, players must identify the current
gaps and assess the potential solutions. Then,
they can outline and prioritize a fitting strategy
based on the stakeholder’s goals.
5. Bridging the gap. Challenging old structures,
creating new frameworks, updating processes,
and establishing new ways of thinking are
imperatives in preparing for the digital
advances and accessing their full potential.

could streamline and accelerate decision
processes in underwriting or claims handling
and thereby reducing current sales barriers
as well as administrative costs.
Together, the integration of digital technologies
in prevention, diagnosis, and treatment increases
the convenience and quality of life for patients.
With the vast amounts of data that can,
should, and must be interpreted by different
stakeholders, medications and treatments can
reach the patient earlier and more effectively
(with the right medications at the right time in
the right dose) to ultimately improve outcomes.

T H E I N T E G R AT I O N O F
D I G I TA L T E C H N O L O G I E S
IN PREVENTION,
DIAGNOSIS , AND
T R E AT M E N T I N C R E A S E S
THE CONVENIENCE AND
QUALIT Y OF LIFE FOR
PAT I E N T S

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For some pharmaceutical companies, these
steps may identify key gaps that are difficult
to fill in-house and may require a search for an
M&A target or partnership. Such collaborations
are an increasing trend in the pharmaceutical
arena, as illustrated by recent partnerships
between Pfizer and Iterative Scopes, between
Thermo Fisher Scientific with Medidata Acorn
AI, and between Gilead and AWS. Essentially,
players across healthcare and life sciences
will have to develop strategies to adopt and
incorporate the technological transformation
with an integrated ecosystem and collaboration
approach in order to move into the digital future.
This will require a much stronger collaboration
between healthcare and life sciences players,
spanning from traditional pharma to medtech,
as well as integrating healthcare providers.

What is data ethics?
In short, data ethics deals with ethical, fair,
and transparent management of data. With
the digitalization of our world, the availability
of data also has increased massively over
the last couple of years, and as a result,
there must be a greater focus on how this
data is used. Concerned industries, public
institutions, and regulators have taken up
the topic and developed new concepts and
guidelines, such as the “Ethics Guidelines
for Trustworthy AI” from the European
Commission or the US’s “Future of Artificial
Intelligence Act.” Their target is to ensure
that data is used in a responsible way and is
lawful, ethical, and robust.
Why is data ethics important for insurers?
The fair treatment of consumers is one of the

P L AY E R S A C R O S S
H E A LT H C A R E A N D
LIFE SCIENCES WILL
H AV E T O D E V E L O P
S T R AT E G I E S T O A D O P T
A N D I N C O R P O R AT E
TECHNOLOGICAL
T R A N S F O R M AT I O N

main pillars in the insurance world. Breaching
this standard can not only result in high
fines but also in high reputational damages.
As an example of how insurers can be
affected, top UK insurers faced serious public
pressure when The Sun reported far higher
car insurance prices for individuals named
Mohammed as compared to those named
John, but with all other relevant aspects
describing the risks being the same. The
underlying AI algorithm contained an implicit
bias related to the name, causing people
potentially to be discriminated against due
to their cultural origin.

I MPER AT I V ES FOR
I NS UR AN CE

How can insurers best deal with this

Current and future technological developments

must develop a clear data strategy and

will change health systems massively. Some
changes have already had an impact while others
still need some time. However, insurers should
closely follow digital health trends and consider
performing the following tasks to be prepared:
1. Consult experts on digital health in the
industry and within the healthcare system
about whether current and future digital health
solutions could have a profound impact on
disease prevention or therapeutic improvements
and, finally, mortality and morbidity.

challenge?
To address this challenge, insurers first
data governance, combined with consistent
and robust data models. In addition,
employees have to be trained in data literacy.
Especially actuaries and risk managers
may play a key role in managing bots
and algorithms by setting standards for
adequate data governance and controlling
their implementation. For ethical and
non-discriminating data usage, it will be
essential to have a thorough understanding
and interpretation of algorithm results and
perform quality checks of the data as well as
of the underlying assumptions and models.
Finally, insurers must clearly document
processes, roles, and responsibilities so that
they are clear to everyone in the company
and are implemented robustly.

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ARTHUR D. LITTLE

2. Implement a data strategy to structure and
standardize portfolio data and process data
to enable in-depth data analysis for improving
key elements of the business model.

Key takeaways

3. Foster data literacy in the company, providing

devices, and advanced data management

support the exchange and foster co-creation
with the objective to further harness the power
of data.

through COVID-19, hence integrating
and enabling technologies like AI, digital

the skills and knowledge employees need to
between domain experts and data analysts

Digital transformation has accelerated

is a key priority across the healthcare

landscape.
Availability of data and technological
advances in data processing like AI are
transforming the treatment paradigms for

patients and professionals.
For patients, ubiquity of digital health
signifies an increased incorporation of
various technologies along their medical

journey.
New available data will influence the
insurance value chain — implementing
a data strategy, hiring data experts, and
standardizing portfolio data are key to
enable in-depth analysis.

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2 . A DVA N C E D T H E R A P E U T I C S &
N E W PA R A D I G M S I N T R E AT M E N T S

I NS IG HTS

risen considerably to an estimated 50% today. 9

Over the past decade, a new paradigm in

metastasized cancers but are now moving into

treating severe diseases has become reality.
Patients can now be treated with personalized,
highly specific, and very effective drugs based
on their individual disease characteristics and
even their genetic patterns. These innovative
therapies encompass various approaches
such as immunotherapies, gene therapies, and
cell therapies. Immunotherapies harness the
patient’s own immune system to fight tumors,
and targeted molecular therapeutics aim at
specific molecules involved in the growth and

non-metastasized tumors. Such advanced
treatments have pushed or are pushing some of
their indications from a high-mortality, short
life expectancy disease to moderate-mortality,
chronic disease, raising multiple implications for
both the life sciences and insurance industries.
At the same time, gene and cell therapies
have seen a renaissance in recent years.
These therapeutic advances aim at restoring
dysfunctional genes in patients by replacing

spread of cancer cells.

or editing the genetic code. They offer a lasting

Therapeutic advances, be they data- or

mortality in the midterm future. Curative cases

technology-driven, have significantly reduced
mortality by transforming once-fatal diseases
into chronic conditions and by providing options
for one-time cures, particularly for many
cancers. Heavy investments in the field — like
the $1.3 billion venture capital spending on gene
therapy companies alone in 20217 or the leading
cancer drug being immunotherapy with sales of
$17 billion in the same year — indicate the rapid
developments and high economic interests in

cure, with less morbidity and potentially less
in oncology are already available: patientderived, genetically modified Chimeric Antigen
Receptor T-cell therapies (CAR-T) have been
found to cure patients, with those treated
10 years ago still alive today.
Gene therapies based on technologies such as
CRISPR-Cas (“gene scissors”) can directly edit
a patient’s genome to provide a one-time cure.
These technologies may also become a core

advanced therapeutics.

treatment pillar beyond oncology and especially

Immunotherapies and targeted molecular

10% of all Europeans suffer. In 80% of these rare

therapeutics have improved survival and
morbidity in many cancer patients. For
example, in advanced stages of melanoma,
immunotherapies have significantly increased
the life span of patients: 20 years ago, the
life expectancy averaged six months whereas
today, more than 50% of patients are alive
after five years. 8 In 2011, only 2% of cancer
patients were eligible for so-called immune
checkpoint inhibitors, a number which has
7
8
9
10
11

12

These therapies thus far have focused on

for rare genetic diseases, from which almost
diseases, a genetic origin is likely.10
We estimate that within the next 10 years, a
significant number of genetic diseases could
become curable, considering that 13% of the
drugs indicated as being developed for rare
diseases are precision therapies based on
specific molecular targets.11 More than 300
clinical trials are currently investigating gene
therapies for different diseases.

“Over $1bn Raised in Venture Capital Funding for Gene Editing in 2021.” GlobalData Healthcare, 27 January 2022.
Wang, Xi, et al. “Targeting Monoamine Oxidase A for T Cell–Based Cancer Immunotherapy.” Science Immunology, Vol. 6, 2021.
Nogrady, Bianca. “Game-Changing Class of Immunotherapy Drugs Lengthen Melanoma Survival Rates.” Nature Index Cancer 2020, 22 April 2020.
“Rare Genetic Diseases.” National Human Genome Research Institute, 2018.
Mueller, Christine M., Gayatri R. Rao, and Katherine I. Miller Needleman. “Precision Medicines’ Impact on Orphan Drug Designation.” Clinical and
Translation Science, Vol. 12, No. 6, 11 July 2019.

ARTHUR D. LITTLE

I M PAC TS

A DVA N C ED THER A PEU TI C S
A RE C H A N G IN G A ND
WILL C O N TIN UE TO
C H A N G E THE TRE ATMEN T
PA R A D I G M S AS WE
C URREN TLY K N OW THEM

Advanced therapeutics aim to make oncefatal diseases chronic or cure them altogether.
Consequentially, they are changing and will
continue to change the treatment paradigms
as we currently know them. This has multiple
key implications on various healthcare and life
sciences players (see Figure 2 for a selection
of key impacts).
Advanced therapeutics will change how

costs initially but likely long-term economic

drugs are developed and provided. For the

benefits. Currently, this is stretching all

developers, which include not only drug and

healthcare systems and will require alternative

medtech developers but also manufacturers

financing and payment models.

(e.g., contract manufacturing organizations)

For health insurers, the initial costs of novel

and research experts (e.g., contract research

therapies are high. For one type of lung cancer,

organization), this presents not only new assets

for example, the costs of current immune

and growth opportunities but also complexities
with short timelines.

checkpoint inhibitors can reach up to $100,000

Patients as well as providers and payers will

standard therapy.12 Especially in cases of

face the dilemma of having higher-priced drugs

therapeutic response such as when the tumor

but with the increased benefits and ultimately

is effectively reduced, the costs of ongoing

lower long-term costs based on the possibility

therapies increase in a linear manner. This will

of being treated at home or even cured. Payers

likely elicit discussions with medical societies

and providers will also face increasing drug

and healthcare providers to give clear guidance on

prices and the need to balance the economics

therapy duration and introduction of cost policies.

curative gene therapy, which has extremely high

biosimilars will provide less costly alternatives.

per year compared to $9,000 for the previous

with societal
especially inof
theadvanced
case of
Astherapeutics
with all novel therapies, patents will expire and
Figure
2.benefits,
Key impacts

Figure 2. Key impacts of advanced therapeutics

Rapid technological
adoption

Innovation in
clinical trial design

High cost & new
reimbursement models

From hospital
to @home

Increasing
expectations

Manufacturing,
research, and clinical
development must
adopt to novel, advanced
treatments

New treatment
paradigms, a result of
increasing disease
curability and chronicity,
require innovative and
optimized clinical trial
designs

Treatments with onetime curative potential
(e.g., cell and gene
therapies) feature high
price tags from US
$300,000 to $2 million

Chronicity of diseases
increases demands for
treatments to be
provided at home
instead of hospital

Improvements in
mortality and morbidity
increase general
expectations on next
treatments

Key

considerations

Timelines, capabilities,
and capacities must be
rapidly and constantly
adapted

Various factors, such as
endpoints, timelines,
and patient
specifications,
have to be adjusted

Novel reimbursement
models need to be
adopted and propagated

Supply chains will
increase in complexity,
whereas the providers’
role will also evolve
consequentially

There is a need to
consider not only
efficacy but also safety
and convenience (e.g.,
considering less invasive
interventions)

Description
of impact

Key affected
stakeholders

Payors

Developers

Patients

Providers

Source: Arthur D. Little

Source: Arthur D. Little

12

German Federal Ministry of Health. “Annex XII — Benefit Assessment of Medicinal Products with New Active Substances According to § 35a SGB V:
Ipilimumab.” Federal Gazette, Vol. B3, 23 August 2021.

13

 

In fact, the immune checkpoint inhibitors

Similar to cancer, insurance applicants with

mentioned above will lose their patent

severe genetic disease are offered, if any,

protection from 2026 onward. Lower costs for

high premium loadings due to the disabling

these drugs will shift cost-effectiveness into

nature and up-to-now limited therapeutic

a more financially sustainable direction for

options. Curative gene therapy that abolishes

healthcare providers and health insurers. Value-

disease morbidity could extend insurability to

based pricing could be a method to estimate

these persons, offering novel products to new

the added benefit for the individual patient and

customers.

to mitigate “overspending” on treatments that
have only minimal added benefit.
Still, assessing cost-effectiveness is highly
specific to the respective markets and heavily
influenced by public healthcare policies. Life
and health insurance are also affected by
this new treatment paradigm. Considering
cancer and life insurance, insurers currently
offer substantial, but risk-adequate, premium
loadings for regionally metastasized cancers
and decline the majority of applicants with
distant metastasized tumors due to their high
mortality and disabling morbidity. If cancer
patients have fewer long-term side effects, a
longer life expectancy, and less morbidity due
to these advanced therapeutics, insurability
could be extended, even for metastasized
disease.
With this progress in mortality and quality of
life, cancer survivors could potentially return
more frequently into an active work life after
initial disability. Since cancer is one of the key
claims drivers in life and health insurance in
many markets worldwide, there is a need for
effective measures to ensure that reactivation
of occupational disability from this cause is
considered.
Furthermore, a substantial impact on critical
illness (CI) products is very likely, as cancers
comprise the largest disease group covered
by this insurance product. If several cancers
or at least stages of certain cancers lose their
negative effect on prognosis and disability,
CI definitions will have to be adapted. Even
regionally metastasized cancers could lose
their debilitating effect after treatment and
would not trigger a claim. On the underwriting
side, some cancer types would receive favorable
loadings or could become insurable for CI
products.

14

IMP E RATIVE S FOR
H EALTH CARE & LIFE
SCIENCES P LAYE RS
Advanced therapeutics will shape how our
healthcare systems are set up in the future
and will require new approaches to deal with
the associated challenges, such as drug
development, costs, manufacturing, supply
chain, and expectation management. The
consequential shift in treatment paradigms
brings unprecedented opportunities and
complexities for which all stakeholders
need to prepare, assess, and transform
their organizations and business models.
As all stakeholders are affected by the
new treatment paradigms, the specifics
of the different steps may vary. But since
the advances in therapeutics will affect all
players, preemptive steps are necessary to
be best prepared. Of particular importance
is the development and implementation of
highly coordinated supply chains that link
patients, doctors, analytics organizations,
drug developers, and manufacturers to bring
advanced therapeutics to the bedside where
and when they are needed. This will require the
support of an integrated healthcare ecosystem
comprised of private and public payers to
provide the necessary reimbursement to fund
both current treatments and the development
and implementation of the next generation of
therapeutics.
In addition, participating ecosystem players
must not only ensure the effectiveness and
added value of the treatments, but also that
healthcare providers have the right capabilities
and infrastructure to deliver these new
advanced therapies at scale.

ARTHUR D. LITTLE

I M P E R AT IV ES FO R
I N S U R A NC E
Advanced therapeutics may only have indirect

Key takeaways

consequences for insurers, but these can be

improved outcomes and even cures for

parts of the insurance value chain. In response,

1. Identify how the current insurance portfolio

be expensive today but will decrease going
forward.

Rare or formerly untreatable diseases
become manageable through new
therapy, shifting the focus from mortality

treatment, as this is the most relevant disease
life and health sector. Treatment costs may

patients.

technologies such as cell and gene

is affected by advances in the fields of cancer
group for many insurance products in the

enables highly personalized, specifically
targeted therapies with dramatically

of high relevance as they can impact different
insurers should:

The development of innovative therapies

to morbidity.
Insurability could be extended to
previously high-risk diseases.

2. Consider advanced therapeutics in product
development as new treatments may

require updates in product definition or even
completely new product solutions.
3. Update medical risk assessment guidelines
accordingly in defined intervals with riskadequate loadings that reflect improved
survival and the diminished disability of cancer
survivors or patients with genetic diseases
treated with advanced therapeutics.
4. Consult with internal and external experts
to determine if and under which circumstances
persons with rare genetic diseases should
become part of the portfolio, potentially
expanding insurability to a group of thus
far uninsurable persons.

15

 

3. POWER OF GENES & OMICS

I NS IG HTS

Additionally, the application of predictive

The secrets of the human genome are

of detecting genetic abnormalities. In fact,

increasingly being demystified — and thus
its impact on our health is becoming more
prominent. Findings from so-called genomics
are helping to develop new and much more
personalized treatments or therapies, as well
as allowing the identification of personal risks
at a very early stage. The success of messenger
RNA (mRNA)-based COVID-19 vaccines now
provides a classic example of how genomic data
from the virus was used to rapidly develop a

depending on the country, whole genome
sequencing services are now offered for
less than $500, and an increasing number of
providers offer testing in and outside of clinical
settings.
Already today, selected data from omics is
widely used, for example in certain types of
cancer to screen for drug responsiveness and
likelihood of adverse effects. In breast cancer,

pharmaceutical product.

for example, decisions on treatment regimens

Beyond genes, large-scale biologic information

profile of cancer cells (among others, through

can be gathered from other pools of molecules
to generate transcriptomics (the study of
RNA produced from the genome), proteomics
(the study of proteins in an organism), and
metabolomics (the study of molecules and
products processed by cells, tissues, or
organisms), among others. The science delves
into various aspects of biomolecules such as
structure, function, and modifications and how
they respond to different stimuli. Together,
the different omics13 vastly expand the breadth
and depth of our understanding around human
physiology and pathology, including insights
into disease development and treatment

can be determined by the gene expression
the presence of the so-called human epidermal
growth factor receptor 2). And, recently, a
genomic approach showed that by analyzing
DNA from tumor cells in the blood, patients
with colon cancer could receive a tailored
therapy, reducing the need for chemotherapy
by almost 50% and thus preventing associated
side effects.14 More recently, omics such as
metabolomics have been extensively explored in
the context of diagnosis and disease monitoring.
Data generated from omics is a major origin
of big data in healthcare and provides a
large source of information that has thus far

effects.

barely been used. Due to the complexity and

The availability of the data will enable further

and computational power (such as quantum

advances in the fundamental understanding of
the most complex biological systems, including
the central nervous and immune system, while
also pushing the medical science to everincreasing personalization of medicine.

13

14

16

testing is rising with the massive drop in costs

amount of omics data, sophisticated analysis
computing) are necessary. Incorporating
technologies like AI and ML transforms the data
into useful information. These technologies
reduce costs and time of analysis and simplify
identification of patterns and associations,
which can improve medical decision making.

The term “omics” encompasses the scientific field of collecting, quantifying, and analyzing large pools of biologic molecules, from single cells
to whole organisms such as the human body, in both normal health or with disease (e.g., cancer). Molecules can be DNA (genomics), all kinds of
RNA (transcriptomics), proteins (proteomics), metabolites (metabolomics), lipids (lipidomics), and sugars (glycomics) as well as their interactions
(interactomics).
Tie, Jeanne, et al. “Circulating Tumor DNA Analysis Guiding Adjuvant Therapy in Stage II Colon Cancer.” New England Journal of Medicine, Vol. 386,
16 June 2022.

ARTHUR D. LITTLE

For example, in a recent breakthrough, in silico

how personal medical data can be gathered

quaternary protein structures and ligand-

and utilized. Privacy concerns must be balanced

receptor interaction model are now being used

with the clear medical benefits to personal

to develop libraries of optimal drug structures

and communal health, and governments and

for therapeutic interventions in individual

regulators must provide guidance and clear

tumors even before sequencing the causative

guidelines under which the medical system

cancer gene.

can function.

However, two main considerations currently

A multi-omics strategy combined with other

hamper the widespread and in-depth use of omics

biomedical data such as patient history and

data in real-life settings. First, the incorporation

clinical data could provide the greatest benefit

into clinical practice is slow because healthcare

within a holistic diagnostic and treatment

systems are still at the beginning of their digital

approach.

transformation. Much more work is needed to
provide healthcare professionals with the
necessary infrastructure and technologies, and
to develop the specific skills required to work with

IMPACTS

omics data.

Omics have the potential to significantly change

Second, medical consensus is lacking on

wide-ranging impacts to healthcare and life

many aspects of information generated from

sciences players (see Figure 3). Patients and

omics data alone. As many diseases are also

care providers also benefit from omics through

strongly influenced by environmental factors,

the growing personalization of medicine,

the greatest benefits arise when omics data

improvement of treatment outcomes, and the

is integrated into a holistic diagnostic and

reduction of inefficient and costly therapies.

treatment approach. The realization of its

While the omics revolution is based on the

potential not only rests on changes to the

generation of vast amounts of data, this

health system but also the regulatory and legal

data is still a component of an overall health

frameworks of multiple countries that govern

ecosystem.

medicine and healthcare in the future, bringing

Figure
3. Integration of omics
into healthcare
Figure
3. Integration
of omics
into healthcare

Diagnostics

AI

Holistic
decision
making

Precision
medicine

Omics and the
power of genes
Multiomics

Drug
discovery

Big data

Patient
selection

Source: Arthur D. Little

Source: Arthur D. Little

17

 

This ecosystem contains different players.

Additional information from other non-genetic

Regulatory agencies provide the legal

omics could overcome this potential information

framework in which the entire system operates.

asymmetry and provide superior risk prediction

Tech companies deploy the required tools to

beyond or in addition to genetic testing, as

acquire and analyze data that can then be

legislation on non-genetic omics is not different

used by research institutes, universities, and

from conventional laboratory parameters.

pharmaceutical companies. Their target is to
better understand diseases and develop new
and more effective treatments. Finally, medical
professionals provide care to individual patients.
Within this ecosystem, demands on healthcare
professionals and regulators are increasing
with the need for additional knowledge and
technological skills.
There is also an ethical responsibility for these

I N N O VAT O R S A L S O
H AV E T O A C C O U N T F O R
THE RISING NEED TO
C O N N E C T T H E D I G I TA L
A N D C L I N I C A L S PA C E

professionals to provide patients with the best
possible information while medical relevance
and the impacts of many genomic findings
remain under discussion. Professionals also
need access to the technological resources
and skill sets to work with and analyze omics
data, which requires significant investments

As an example, proteomics generated
and analyzed from a blood sample can
predict cardiopulmonary fitness or liver fat
development to a high accuracy.15 This non-

from health providers.

genetic but highly sophisticated data could

Innovators can utilize the enormous potential

medical examinations in underwriting, such as

of omics data that opens new possibilities
for the development of drugs, diagnostics,
or technology. But they also have to account
for the rising need to connect the digital and
clinical space and to create solutions that allow
cost-efficient and easy application of omics for

then be used instead of the current cumbersome
treadmill and stress tests, lung function tests,
computer tomography, or echocardiograms to
support risk-adequate loadings for applicants.
Even in markets with broad access to genetic
information for underwriting, non-genetic omics
could improve risk detection and prediction,

other healthcare and life sciences players.

thus potentially omitting time-consuming in-

In this context, of particular importance is the

omics could then be complementary to or even

need for ethical use of data and clear guidance

replace genomics, depending on the predictive

from regulators and governments to codify the

value and technical effort to yield the data.

legal obligations of organizations that gather
and use that data. Data policies regarding
biometric information are exceptionally
important in the insurance industry. It is
well known that an information asymmetry,
particularly for genetic information, between
the applicant (with genetic information) and
the insurer (without the genetic information)
could lead to negative anti-selection. This
could be the case if genetic risk assessments
become more widespread and gain in predictive

person examinations, as described above. Other

Analysis of omics data could become a
vital part of the underwriting process, but
presumably only when high contract sums are
assured, as the costs for specimen analysis
and interpretation are currently high. As omics
increasingly will be used in clinical routines as
well, we expect significant price reductions
soon, which will be favorable for cost-benefit
evaluations of implementing omics into
insurance risk processes.16,17

value. Then a larger number of applicants —
and therefore a larger cumulative risk — could
materialize in the insurance portfolio.

15
16
17

18

Williams, Stephen A., et al. “Plasma Protein Patterns as Comprehensive Indicators of Health.” Nature Medicine, Vol. 25, 2 December 2019.
Bennike, Tue Bjerg, et al. “A Cost-Effective High-Throughput Plasma and Serum Proteomics Workflow Enables Mapping of the Molecular Impact
of Total Pancreatectomy with Islet Autotransplantation.” Journal of Proteome Research, Vol. 17, No. 5, 19 April 2018.
Vowinckel, Jakob, et al. “Cost-Effective Generation of Precise Label-Free Quantitative Proteomes in High-Throughput by MicroLC and DataIndependent Acquisition.” Scientific Reports, Vol. 8, 12 March 2018.

ARTHUR D. LITTLE

I M P E R AT IV ES FO R
HE A LT H C A RE & LI F E
S C I E N C E S PLAY ER S

IMP E RATIVE S FOR
INSURANCE

A key challenge for the healthcare and life

diagnostics and enable personalized medical

sciences players centers on the question of
how to integrate and utilize these insights
and data into healthcare delivery to enable

Omics will help in developing more precise
treatments. Its routine implementation in
healthcare is expected within this decade. The
transition in the insurance business could then

truly personalized medicine.

follow shortly. In preparation, insurers should:

It is essential to create efficient operating

1. Monitor health policy regulation in their

models that underlie a personal health
ecosystem comprised of primary care givers,
data scientists, translational medicine
researchers, and biopharmaceutical and medical
device manufacturers. Continued monitoring
of patients’ data will enable updates to their
treatment regimens to deliver the most
effective treatments but requires a full-scale
omics view that accounts for changes in protein
expression, mutations, and the transcriptome
of the relevant component of a given pathway.
Developing this system to effectively realize
the full potential of omics and personalized
medicine will require the following:
1. Collect, structure, and analyze data. A vast

markets to determine whether mass-data
acquisition from biologic sources within an
individual can be used for risk assessment.
2. Use insurance medicine consultations to
determine whether omics exist that have
both accuracy and predictive value and are
available, feasible, and cost-effective for
implementation in the insurance application
process.
3. If omics are available, evaluate whether they
can be harnessed not only in underwriting but
also in the in-force insurance population to
reduce cancer risk and thus potential claims.

amount of omics data is already available,

Key takeaways

and more is generated every day. To seize the

opportunities lying within this data, healthcare
and life sciences players must develop and

2. Build capabilities and data literacy.

All components of the personal health

capable of rapidly sharing data, sources
of truth for education, trusted and secure
data repositories, and clearly defined roles
and responsibilities supported by health
authorities for data use.
3. Integrate data into development,

manufacturing, and delivery. Data must

based on the molecular level.
The increasing amount of omics data
requires and enables new technological
tools like AI or ML to be effectively used

ecosystem will require some degree of data
knowledge, hardware and software systems

data and are significantly extending our
knowledge about organisms and health

implement strategies for accelerated data
analysis.

Omics are a vast source of biological

for more specifically targeting diseases.
The use of omics will grow in the future
because of the large potential this data
provides for medical applications.
Omics could support individuals in
preventing or effectively treating
diseases, thus reducing costs to the
healthcare system as well as increasing

be acquired from patients, transformed

benefits to patients, and potentially

into actual treatments, and delivered to the

avoiding claims for insurance companies.

patient. This requires care givers, data centers,
and drug manufacturers to be operationally
connected in a way that allows for rapid
turnaround times, maintains the physical
integrity of personalized medicine, and allows
for repeated feedback loops of treatment
development and improvement.

19

 

4 . M E N TA L H E A LT H

I NS IG HTS & I M PACTS

The second factor of uncertainty is

Mental health is a topic that concerns society

mentally ill still brings negative prejudices onto

as a whole and, more than ever, the insurance
industry, medicine, pharmacology, and large
parts of the healthcare system. Increasing case
numbers and costs — as well as the associated
extremely complex challenges in all the
disciplines mentioned — are just a few
of the many reasons for this development.
We discussed the current developments in
mental health, the state of clinical research, and
the resulting opportunities, especially for the
insurance industry, with one of the world’s most

the scene. In order to not expose themselves
to this, many people hesitate to make use of
professional medical support. Treatment is
delayed, and those affected are put on the
path to incapacity for work, early retirement,
or occupational disability.
Q. What consequences does this have with

regard to the risk assessment of insurers?
A. Dr. Alban Senn: Our statistics show that
mental illness is increasing as a cause of

renowned researchers in this field, Prof. Dr. Dr.

disability. This trend has been unbroken for

Emeritus Director of the Max Planck Institute

observations. It is estimated that around 27.8%

Florian Holsboer, psychiatrist, chemist, and

for Psychiatry in Munich, and Dr. Alban Senn,
Chief Medical Officer and Head of the Medical
Research & Development team at Munich Re.
In this chapter, we share a transcript from that
interview.

10 years, which is consistent with clinical
of the German adult population suffer from a
mental illness at least temporarily every year.
That amounts to 17.8 million people.

This raises two questions for us: How many of
these people fall ill so severely that we cannot

Q. Professor Holsboer, the figures from

insure them and — more importantly — how do

increasingly the cause of occupational

that we can offer them insurance? That is the

insurers show that mental illnesses are

we identify those whose prognosis is so good

disability. Can you confirm this?

challenge we face.

A. Prof. Dr. Dr. Florian Holsboer: The increase

Q. So, insurability thus evolves with medical

in documented cases of mental illness is a fact.
However, we do not necessarily know whether
more people have actually become mentally ill.
The increase could as well be since our society
today is a bit more open to mental illness
diagnoses and that the individual is more likely
to accept them.
In general, there are two uncertainties in
the evaluation of the case numbers. First, we
make psychiatric diagnoses solely based on
interpretation of verbal communication. In other
words, we depend on what patients and relatives
tell us.

20

stigmatization. The statement that someone is

progress. Which forms of therapy do you think
are particularly promising?

A. Prof. Dr. Dr. Florian Holsboer: The
antidepressants available today are too
unspecific. The drugs work on too few patients,
they take too long to work, and they have too
many side effects. One explanation for this is
the individual manifestation of mental illnesses.
Two patients can be the same age, have the
same sex, show identical symptoms, and get the
same diagnosis — but in the background there
may be very different disease mechanisms.

ARTHUR D. LITTLE

With the help of innovative antidepressants,
we will be able to specifically address and
cure this disease mechanism in the future.
This is not utopia. Thanks to the successes in
genome research, we should soon be able to
offer laboratory tests that provide information
on which patients a highly specific drug will be

Q. What are these biomarkers and how can
they be identified?

A. Prof. Dr. Dr. Florian Holsboer: Biomarkers
are genetic and genomic information, as well
as certain biochemical and physiological data,
from which we can derive valuable information

effective or not.

on the individual risk of a person’s illness. In

Q. Laboratory tests are surely an important

information, medical research is developing

future consideration. Another one is digital

order to be able to collect and evaluate this
innovative testing possibilities and better

apps for prevention. How do you assess

algorithms.

measurable effects in insurance medicine?

The keywords are “artificial intelligence” and

A. Dr. Alban Senn: First of all, I welcome

is currently enormous. This can be seen, for

everything that supports and helps patients

example, in genome sequencing: just a few years

with their psychological challenges. It is easy to

ago, the costs were tens of thousands of euros,

imagine that mental health apps can strengthen

and today it is a few hundred euros only.

these? Could they be used to achieve

individual mindfulness and improve resilience to
mental illness. If the digital apps also facilitate
access to professional help, positive effects are
quite possible. There are studies that suggest

“machine learning.” The progress in this field

This brings genome sequencing as a biomarkerbased preventive examination close to practical
applicability — at least in terms of costs.

this. However, the abundance of app offerings is
large, and the potential is not yet exhausted. At
this point we, as the insurance industry, should
become active; for example, by supporting
customers and saying which of the digital offers
are useful and effective. I am convinced that
digital apps can develop valuable offerings,
especially in the area of preventing mental
diseases.

I F T H E D I G I TA L A P P S
A L S O FA C I L I TAT E A C C E S S
T O P R O F E S S I O N A L H E L P,
POSITIVE EFFECTS ARE
QUITE POSSIBLE

However, they will not be able to replace
psychiatric pharmacotherapy, which means
medication and conventional psychotherapy.
Q. How do you assess such digital tools from
a scientific point of view? Could they lead
to any measurable effects in insurance
medicine?

A. Prof. Dr. Dr. Florian Holsboer: I share Alban’s
assessment. Digital apps will never be able to
replace the trusting relationship between a
patient and his or her doctor, but they open new

Q. Could such screening also have positive
effects for the insurance industry, for
example, in underwriting?

A. Dr. Alban Senn: Yes, absolutely. The ability to
predict individual risks and disease progression
is part of the core of our work in risk assessment.
The better and more objective the predictions,
the easier it is to assess risks. In life insurance,
however, we work with complex models, which

preventive opportunities.

ultimately result in mere probabilities.

Looking into the future, I see another, also

These probabilities will probably never be 100%

technology-based, preventive option:
biomarkers that can indicate the advent
of a mental illness. This would give us the
opportunity to intervene before the disease
is even there.

or 0%, but somewhere in between. Therefore,
objective findings are essential building blocks
for us. We know that even the best data cannot
do justice to human complexity. This must
be considered and therefore always have a
comprehensive view on the applicant.

21

 

illnesses play an even greater role in 10 or 20

IMP E RATIVE S FOR
INSURANCE

better under control thanks to new forms

1. Support measures to destigmatize mental

Q. Let’s look at the crystal ball: Will mental
years? Or will current challenges be much
of therapy and prevention?

A. Prof. Dr. Dr. Florian Holsboer: Successful
measures against stigmatization and better
treatments, especially through the introduction
of personalized therapy, will increase patient
confidence and social acceptance of the diseases.

illnesses. As a result, mental illnesses can be
detected and treated at an earlier stage, so
that incapacity for work, work occupational
disability, and early retirement are more often
avoided.
2. Strengthen the resilience of insured persons
and support them in individual prevention

The number of cases is therefore likely

by promoting selected mental health apps

to increase further, but compensatory

with proven effectiveness and giving insured

improvements will result in less progression to

persons support in app selection.

a chronic form and less early retirement at the
same time. And what should not be forgotten
is the following: patients who experience
depression or become chronically depressed

3. Benefit from medical progress and improved
prevention by continuously expanding
insurability.

have a two to four times higher risk of dementia,
cardiovascular disease, and diabetes. Successful
psychiatric therapies will reduce these cases.
A. Dr. Alban Senn: I am also optimistic about

Key takeaways

the future and think that the life and health

mental illnesses every year, which at the

outlined developments. In this respect, I hope

same time significantly exacerbates the

that the destigmatization of mental diseases
then be treated faster, more specifically, and
ultimately more successfully than today. In this

personalized therapeutic approaches.

The mechanisms of mental illness are too

even more effective mental health apps as
a preventive measure.
3. Focus on AI and ML in healthcare and
especially for the further development
of laboratory tests to support additional
breakthroughs.

22

research and the public.
Technologies for the identification of
psychiatric biomarkers — for example,
information — are becoming more
powerful and cheaper to use. This opens

up new diagnostic and treatment options.
Personalized therapies — for example,
with the help of innovative, individually
developed antidepressants — will
increase the tolerability and effectiveness

2. Technology-based prevention options
developing new biomarkers or by offering

the topic are raising awareness of mental

in the form of genomic and genetic

individualized for non-specific drugs.
have great potential. Use it, for example, by

Successful measures to destigmatize

placing them increasingly in the focus of

developments.

1. Pharmacological research should focus on

risk of other somatic diseases.

illness in society and medicine and

sense, I am looking forward to the upcoming

I MPER AT I V ES FO R
HE A LT HCAR E & LI F E
S C I EN CES PLAY ER S

significantly: currently, around 17.8 million
adults in Germany alone are affected by

insurance business will benefit greatly from the

will lead to more early diagnoses, which can

Mental illnesses have increased

of pharmacological treatment options.
These improved and more precise
treatment options, as well as increased
prevention and more accurate risk
assessment, will make it possible in the
future to significantly expand insurability
in life and health insurance.

ARTHUR D. LITTLE

23

 

5 . PA ND EMI C RI S K

I NS IG HTS

Moreover, ice samples from China have been

COVID-19, like many previous pandemics, clearly

years19 old as well as more than 750,000-year-

demonstrated how a pathogen can emerge from
wild animal hosts and spill over into humans. The
increasing proximity between wild animals and
humans due to deforestation, change of land

found to contain viruses that were ~15,000
old bacteria. 20 These potential pathogens
could theoretically give rise to the next global
pandemic, as the Arctic and permafrost regions
are warming at an unprecedented speed.

use, and urbanization, together with changes in
the natural world driven by climate change and
loss of biodiversity, are exposing humanity to
novel pathogens, thereby raising the likelihood
of the next pandemic.
A large pool of as yet uncharacterized viruses
and bacteria is circulating in wild animals
worldwide, with some of them having pathogenic
potential to humans. Changes within the
natural habitats of these animals increase the
chance of spreading these viruses or bacteria

S T U D I E S S H O W T H AT
A P P R O X I M AT E LY
1 .7 MILLION VIRUSES
RESIDING IN MAMMALS
AND BIRDS ARE STILL
UNCHAR AC TERIZED

widely across species, including humans. Once
transmitted, a global spread of another highly
contagious infectious disease like COVID-19

But climate change cannot only increase the

could be possible and, in fact, the current

probability of new or reemerging infectious

monkeypox outbreak illustrates this point. As

diseases, already existing diseases also are

of 22 August 2022, just over 40,000 cases have

highly impacted by increasing temperature.

been reported globally, according to the US

In fact, estimations show that 58% of all

Centers for Disease Control and Prevention.

infectious diseases due to bacteria, virus, or

Though a zoonotic infection most often seen

other pathogens have been aggravated by

in West and Central Africa, monkeypox is now a

climate hazards in the past. 21 Studies show that

global health risk and is a harbinger of potential

approximately 1.7 million viruses residing in

future health threats.

mammals and birds are still uncharacterized.

The highly complex relation between climate
change and risk for infectious diseases is
demonstrated by an outbreak of anthrax, a
severe bacterial infection, in Siberia in 2016.18
The disease was transmitted by bacterial spores
from reindeer corpses that were released from
permafrost due to rising temperatures.

18
19
20
21

24

Of those, 50% are thought to have the potential
to spread to humans. The number of already
characterized viruses that are known to spill
over to humans is only around ~250. However,
as the rapid development and introduction
of COVID-19 vaccines and antiviral drugs has
shown, current medical technologies enable
us to react quickly to emerging viruses.

Stella, Elisa, et al. “Permafrost Dynamics and the Risk of Anthrax Transmission: A Modelling Study.” Scientific Reports, Vol. 10, No. 16460,
7 October 2020.
Zhong, Zhi-Ping, et al. “Glacier Ice Archives Nearly 15,000-year-old Microbes and Phages.” Microbiome, Vol. 9, No. 160, 2021.
Christner, Brent C., et al. “Bacterial Recovery from Ancient Glacial Ice.” Environmental Microbiology, Vol. 5, No. 5, 2003.
Mora, Camilo, et al. “Over Half of Known Human Pathogenic Diseases Can Be Aggravated by Climate Change.” Nature Climate Change, Vol. 12, 2022.

ARTHUR D. LITTLE

From the initial description of the SARS-

However, beyond potential pandemic risks from

CoV-2 virus to the approval of the first mRNA

viruses, a serious threat of growing antimicrobial

vaccine, it took less than 12 months, which is

(or antibiotic) resistance in healthcare systems

unprecedented in medical history (see Figure

is imminent. Antimicrobial resistance causes

4). By implementing additional effective public

longer hospital stays, more complications,

health measures, governments and healthcare

and higher treatment costs (estimated at

systems are likely to improve their resilience for

an additional $1,400 for each patient with

future COVID-19 outbreaks and other pandemics

infection), 25 which all contribute to rising

(albeit to varying levels). The incredible success

costs for healthcare systems and insurance

of COVID-19 vaccine development stands as

companies. The long-term health effects of

the demarcation point of a new era in which

surviving an infection with antibiotic-resistant

medical science has the tools and knowledge to

bacteria is less understood but could confer

rapidly analyze pathogens and develop multiple

a long-term mortality risk. 26 In the European

countermeasures against them.

Union alone, approximately 27,249 deaths (age-

22

In the case of COVID-19, nucleic acid sequencing,
lipid nano-particles, and mRNA design were
the underlying technologies enabling vaccine

standardized) were attributed to antibioticresistant bacterial infections in 2015, increasing
from 11,144 in 2007. 27

development. 23 Going forward, advances in AI

Developing antimicrobial resistance is a

that enable modeling of quaternary protein

natural evolutionary mechanism, especially in

structures, such as antigen/antibody binding,

pathogens like bacteria. Antimicrobial agents

will further enhance vaccine and therapeutics

(or antibiotics) have been in use for almost 100

development. These technologies can forecast

years and are the main pillar for treatment of

likely mutation sites in viruses leading to new

serious bacterial infections. As a reaction to

virus variants. Therefore, it will be possible to

exposure with antimicrobial agents, bacteria

preemptively design vaccines for future virus

can adapt and develop strategies that enable

variants or pathogens. 24

them to resist. Antimicrobial resistance is not
a new or surprising concept, as already in the

Figure 4. History of timeline from pathogen
discovery
to
1930s, shortly
after the first
clinical use of an
antibiotic, resistant bacteria were reported.
vaccine approval
Figure 4. History of timeline from pathogen discovery to vaccine approval
Year of vaccine
approval

Discovery of
pathogen

Meningitis

Polio

Measles

COVID-19
1880-1900

1920-1940

1960-1980

2000-2020

Source: Arthur D. Little
22
23
24
25

Ball, Philip. “The Lightning-Fast Quest for COVID Vaccines — And What It Means for Other Diseases.” Nature, 18 December 2020.
Dolgin, Elie. “The Tangled History of mRNA Vaccines.” Nature, 14 September 2021.
Schmidt, Fabian, et al. “High Genetic Barrier to SARS-CoV-2 Polyclonal Neutralizing Antibody Escape.” Nature, Vol. 600, 20 September 2021.
Thorpe, Kenneth E., Peter Joski, and Kenton J. Johnston. “Antibiotic-Resistant Infection Treatment Costs Have Doubled Since 2002, Now Exceeding
$2 Billion Annually.” Health Affairs, Vol. 37, No. 4, 21 March 2018.
Drummond, Rebecca A., et al. “Long-Term Antibiotic Exposure Promotes Mortality After Systemic Fungal Infection by Driving Lymphocyte
Dysfunction and Systemic Escape of Commensal Bacteria.” Cell Host & Microbe, Vol. 30, No. 7, 13 July 2020.
Cassini, Alessandro, et al. “Attributable Deaths and Disability-Adjusted Life-Years Caused by Infections with Antibiotic-Resistant Bacteria in the
EU and the European Economic Area in 2015: A Population-Level Modelling Analysis.” The Lancet Infectious Diseases, Vol. 19, No. 1, 5 November 2018.

Source: Arthur D. Little

26
27

25

 

But today, antimicrobial resistance is a growing

Countries that decreased resistance have

problem for healthcare systems worldwide due

reduced antibiotic prescriptions, implemented

to variety of factors.

rigorous surveillance system for multi-resistant
bacteria, and enacted hygiene regimens and

First among these factors is the fact that
discovery of novel antibiotics has declined
rapidly since the 1960s. In fact, over the last
20 years, just one novel class of antibiotics
has been introduced. Second, antibiotic

so-called antibiotic stewardship programs
that foster the rationale use of antibiotics.
The combination of these measures is believed
to result in these impressively low levels of
antibiotic resistance.

prescriptions have steadily increased until
recently, raising the likelihood of antimicrobial

But even these countries are at risk of importing

resistance due to evolutionary pressure. Also

multi-resistant bacteria from different

so-called reserve antibiotics, which comprise

regions or spread from livestock. Resistance

last-resort antibiotics for targeted use in

to commonly used antibiotics in bacteria from

multidrug-resistant infections, have been

food-producing animals remains high, reaching

increasingly used. These factors can lead to

up to 90% for several antibiotics in animals in

futility in treating severe infections with multi-

some EU countries. To address antimicrobial

resistant bacteria, increasing mortality from

resistance as a major public health problem,

otherwise well-treatable diseases.

the EU Commission has implemented a so-

A recent study estimated that approximately
1.3 million people died globally in 2019 due to
infections with multi-resistant bacteria.

28

This

makes antibiotic-resistant infections one of the
major causes of death worldwide, prospectively

called “One Health” policy response, which
improves surveillance and cooperation between
member states. 30 These efforts have led to a
reduction of antibiotic use in food-producing
animals by 43% between 2011 and 2020.

overtaking malaria and HIV as leading infectious

The COVID-19 pandemic could have a major

diseases in the future.

impact on antibiotic resistance of bacteria.
Many COVID-19 patients suffered from
secondary pulmonary bacterial infection, which

R E S I S TA N C E T O
C O M M O N LY U S E D
A N T I B I O T I C S I N B AC T E R I A
FROM FOOD -PRODUCING
ANIMALS REMAINS HIGH

is often treated with antibiotics, sometimes
even preventively. Although in both the US
and EU, overall antibiotic use dropped, certain
bacteria in both geographies showed increasing
resistance against critically important
antibiotics. Moreover, both the US and EU
member states have acknowledged reporting
gaps or delays in implementing action plans for
antibiotic resistance during the pandemic. 31

Although resistance to major antibiotics
is increasing on a global scale, there are
astonishing regional differences. For example,
the average resistance proportions in Italy
or Greece (about 35%) is much higher than
in Germany or the UK (about 10%). Notably,

Therefore, the long-term impact of the
COVID-19 pandemic on antimicrobial resistance
needs further investigation but could indeed
have exacerbated the situation for treating
specific severe infections with several reserve
antibiotics.

some countries, such as the Netherlands or
Nordic countries in Europe, have pushed down
resistance proportions to about 5%. 29

28
29
30
31

26

“Global Burden of Bacterial Antimicrobial Resistance in 2019: A Systematic Analysis.” The Lancet, Vol. 399, No. 10325, 19 January 2022.
“Stemming the Superbug Tide: Just A Few Dollars More.” OECD Health Policy Studies, OECD Publishing, 7 November 2018.
“Antimicrobial Resistance in the EU/EEA — A One Health Response.” OECD, 2022.
“Antimicrobial Resistance in the EU/EEA — A One Health Response.” OECD, 2022.

ARTHUR D. LITTLE

I M PAC TS

disinformation that would undermine the fight
against the pandemic. 35

Entering this century, a wave of severe

Similarly, life sciences players must implement

infectious disease outbreaks such as SARS,

strategies that define the necessary processes,

MERS, and COVID-19 has occurred (see Figure
5). Our global lifestyle and present challenges,
such as climate change, enhance the probability
of another pandemic like COVID-19 coming
predict the probability of another pandemic of
the same or greater magnitude as COVID-19 to
be approximately 25% within the next 10 years
or 3% within any given year.

This would have a

large impact on healthcare systems globally.

consumables, and therapeutics. They should
improve the understanding and resilience in the
global supply chains.

way, and we need to prepare now. Providers must
review the pressure and backlog still present

governmental/regulatory entities and an
improved system of surveillance, detection, and
alerts to be able to face the risks of upcoming
There is an increasing need

from the last pandemic to establish guidelines
for ensuring adequate resources (including
people and supplies) for future challenges while
not overburdening the system. They also need

for governance strategies that encompass

strategies for prevention and should implement

measures of prevention and create an

an adequate level of preparedness and

environment of preparedness and resilience

resilience. This includes the right processes and

toward pandemics and/or the threat of new
and more virulent infectious diseases.

diagnostics, medical technology equipment and

front line when the next pandemic comes our

are under pressure to establish strong

pandemics.

a rapid shift of resources and manufacturing

Healthcare providers once again will be at the

As a result, governments and policy makers

33

next pandemic. These strategies must enable
capacities toward the development of

sooner rather than later. Some risk models

32

responsibilities, and guidelines to prepare for the

measures to ensure to address a pandemic, but

34

also to continue to deliver urgent and chronic

Governance policy — and also insurance
industry — should strengthen communication
of healthcare measures and scientific progress
to improve public understanding and prevent

care, which otherwise could suffer. 36 Supply
chain and digital and remote tools will also be
equally important.

a sinister combination of misinformation and

Figure 5. Pandemics and epidemics caused by viruses and

Figure
5. Pandemics and epidemics caused by viruses and bacteria
bacteria
2009

• Influenza
• Influenza virus A (H1N1)
• Spillover infection from pigs

2006

• XDR Tuberculosis
• Mycobacterium tuberculosis
• Extensively drug-resistant strains

1930–1960

• Polymyelits
• Poliovirus
• Terminated by
vaccine programs

1919–1920

• Influenza
• Influenza virus A (H1N1)
• Spillover infection from
birds

1968–1969

• Influenza
• Influenza virus A (H3N2)
• Spillover infection from birds

2002–2003

• SARS (severe acute
respiratory syndrome)
• Coronavirus SARS-CoV-1
• Spillover infection from
bats or palm civets

1957–1958

2003

1981

2012

• Influenza
• Influenza virus A (H1N2)
• Spillover infection from birds

• AIDS
• Human immuno-deficiency virus
• Spillover infection from primates,
monkeys

• Avian flu
• Influenza virus A/H5N1
• Spillover infection from birds

• Middle East respiratory
syndrome (MERS)
• Coronavirus MERS-CoV
• Spillover infection from
fruit bats, camels

2014

• Ebola
• Ebolavirus
• Spillover infection from bats

NON-EXHAUSTIVE

2015

• Zika
• Zika virus
• Spread through
mosquitos

2022

• Monkeypox
• Monkeypox virus
• Spillover infection from
mammals, monkeys

2019

• COVID-19
• Coronavirus
SARS-CoV-2
• Spillover infection
from bats, pangolins

2017–2022

• Cholera
• Bacterium Vibrio cholera
• Epidemic in Yemen
terminated by vaccine
programs

Source: Arthur D. Little
32
Cheney,
Catherine.
Source:
Arthur
D. Little “How Might Probability Inform Policy on Pandemics? Metabiota has Ideas.” Devex, 31 July 2021.
33 Clark, Helen, et al. “Transforming or Tinkering: The World Remains Unprepared for the Next Pandemic Threat.” The Lancet, 18 May 2022.
34 Moeti, Matshidiso, George F. Gao, and Helen Herrman. “Global Pandemic Perspectives: Public Health, Mental Health, and Lessons for the Future.”
The Lancet, 4 August 2022.
35 Goetz, Miriam, and Lena Christiaans. “Health Insurance Communication in the COVID-19 Pandemic: A Comparative Analysis of Crisis Communication
on Websites.” Prävention und Gesundheitsförderung, Vol. 17, 7 May 2021.
36 Kendzerska, Tetyana, et al. “The Effects of the Health System Response to the COVID-19 Pandemic on Chronic Disease Management: A Narrative
Review.” Risk Management and Healthcare Policy, Vol. 14, 15 February 2021.

27

 

For insurers, a pandemic can lead to significant
losses in the life and health sectors. In fact, the
Association of British Insurers reported that
COVID-19-related payouts for life insurance
claims were £202 million in 2020, rising to

IMP E RATIVE S FOR
H EALTH CARE & LIFE
SCIENCES P LAYE RS
The continued impacts of the COVID-19

£261 million in 2021. 37 Beyond mortality risks,

pandemic emphasize the need for strategies

the impact on disability insurance claims due

that create a sufficient level of preparedness

to Long COVID (or post-COVID-19 condition),

and resilience for the next pandemic. This must

has been a concern for the industry as well.

be addressed from all angles in healthcare and

Long COVID develops more likely following an

life sciences and health policy in the following

initially severe infection, which is fortunately

areas:

the minority of cases. Severely debilitating
Long COVID is therefore a relatively rare event.

1. Prevent. Investing in further research and
analysis of data generated during the COVID-19

Notably, the risk for developing Long COVID,

pandemic will strongly enhance the ability

can be substantially reduced with COVID-19
vaccines. 38 As such, from a medical perspective
we currently only expect a minimal increase
by 0.5% in annual total disability claims due to
Long COVID compared to pre-pandemic levels

to prevent new pandemics. Understanding
spread and spill-over effects of pathogens is
imperative in developing countermeasures to
prevent the emergence of new pandemics. In
addition, it will be important to continue to

for the German private sector, although this

invest in both antibiotic development as well

minor increase may be due to lower average
morbidity and greater vaccination rates among
the insured and does not include the whole

as in measures to curb the development of
multi-resistant bacteria strains globally.
2. Prepare. Preparation is a key factor in facing

working population. Other markets might
experience a different impact of Long COVID or

the threat of the next pandemic. Healthcare

COVID-19-related mortality, driven by different

and life sciences players must analyze the

insurance policies, vaccination rates, and

lessons learned from COVID-19 to develop a

healthcare service to those who are affected. 39

state of preparedness. Going forward, data

This monthly excess mortality indicator shown
in Figure 6 compares the number of people

and data definitions (e.g., what is death due
to COVID-19?) would benefit from a consistent
approach over time and across territories,

who died of any cause in a given month with a
baseline average taken during the pre-pandemic
period 2016-2019. The peaks have varied greatly
across EU states during the pandemic.

wherever possible. Of particular importance is
the development of communication plans to
instill trust in medical authorities and public

pandemic countermeasures.
Figure 6. Monthly excess mortality in the EU (2020–2022)
Figure 6. Monthly excess mortality in the EU (2020–2022)

50

40

30

20

10

0

-10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

2020

2021

2022

Note: Data for 2021-2022 are provisional​
Source: Arthur D. Little, Eurostat
Note: Data for 2021-2022 are provisional
37 “Record Amount Paid Out to Help Families Cope with Bereavement, Ill Health, and Injury.” The Association of British Insurers (ABI), 14 April 2021.
Source: Eurostat

38
39

28

Ayoubkhani, Daniel, et al. “Trajectory of Long COVID Symptoms After COVID-19 Vaccination: Community-Based Cohort Study.” BMJ, Vol. 377,
18 May 2022.
Suchy, Christiane, et al. “Post COVID-19 Condition and Its Potential Impact on Disability — A Proposal for a Calculation Basis for the Disability
Insurance Sector.” Zeitschrift für die gesamte Versicherungswissenschaft, Vol. 111, 19 July 2022.

ARTHUR D. LITTLE

Local governments must take an active role

and to update underwriting guidelines

in planning for future outbreaks by providing

according to the associated health risks and in

consistent funding for both basic and

consultation with insurance medicine experts.

translational scientific research, creating
and maintaining medical countermeasure
stockpiles, developing logistical planning
for triage and treatments, and forging
clear guidelines for communications during
what is often a rapidly evolving yet longduration emergency. Post-hoc analysis of the
effectiveness of responses to the COVID-19
outbreak should be highly informative in
developing future plans.
3. Finance. The allocation of financial resources
for prevention, preparation, and surveillance
is imperative for all players, and it is of vital
importance that is accomplished in such a
way that these resources are independent of
short-term budget resolutions. For example,

2. Consult. Chief medical officers (CMOs) and
their insurance medicine teams have the
expertise to analyze and interpret, very early
in a pandemic, important clinical studies,
such as for COVID-19. Their medical research
and development can make an early impact
assessment on mortality and morbidity
possible.
3. Identify. Infectious risk from non-pandemic
pathogens, such as bacterial epidemics, can
differ from market to market. With the help
of the CMO, identify important differences
in antibiotic resistance and public health
countermeasures to enable a correct risk
assessment for mortality and morbidity risks.

innovators can allocate financial resources
and create initiatives to promote research
on upcoming and already-existing threats.
Recently, Boehringer Ingelheim, Evotec, and
bioMerieux announced in a joint venture that

Key takeaways

they will pour their resources into fighting

must turn their focus toward investing in
innovation. Some pathogens considered as the

through climate change are enhancing

source for a new pandemic are already known,

focus includes bacteria as well as viruses and

other pathogens. As an example, an initiative

analyzes real-time data that can be used in
outbreaks and for preventive measures.

Yet-unexplored pathogens living in
mammals and birds or released through
of glacial ice present considerable risks.
Increasing antimicrobial resistance
provides a rising challenge for healthcare
systems, increasing the urgency for

by UNICEF, together with large software and
search engine companies, generates and

the possibility of future pandemics.

thawing of the permafrost and the retreat

but innovations to diagnose or treat them
remain lacking. And it is imperative that the

of rural or even previously untouched
environments, and increasing pressure

antimicrobial resistance.
4. Innovate. Healthcare and life sciences players

Our lifestyle, increased urbanization

innovative solutions.
Impact on the life and health insurance
business is challenging to foresee, since
health risk and economic distortions have

IMPERATIVES FOR
INSURANCE
The threat of a next pandemic is no theoretic
scenario for the life and health insurance
industries. Their resilience will depend on

substantially differed in past pandemics

between regions and markets.
Healthcare systems and societies must
prepare for those challenges and ensure
better preparedness as well as resilience
before the next pandemic.

certain precautions, including:
1. Prepare. Existing pandemic preparedness and
response plans must be reviewed frequently.
In case of an emerging pandemic, insurers
should install a monitoring process within
their institution to detect early relevant
impacts on mortality and disability business.