
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
3
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.
5
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.
7
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
9
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.
10
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.