Asta receives Lloyd’s approval to deliver clinical trial funding insurance

Asta has been granted in-principle approval from Lloyd’s to establish a new syndicate to deliver a product that would insure clinical trial funding, with a 2024 forecast for annual gross premium written of £75m.

MCI Syndicate 1966 will introduce an insurance product to the biotechnology industry that will aid the development of new therapeutic drugs and insure clinical trial funding in the event a trial fails.

The new syndicate will be managed by Lloyd’s managing agent Asta and is set to commence underwriting from April 2024.

Asta explained that, historically, clinical trial financing can present a high risk or high reward endeavour for technology entrepreneurs, investors and innovators.

Meanwhile, finance providers have previously held a lower appetite, in comparison to other industries.

Supported by TJP economic consulting as an innovator, the product has been designed to encourage a finance innovator-led model, as well as traditional VC investment.

Lorraine Harfitt, chief executive officer of Asta, said: “It has been a pleasure working with the team at MCI and we look forward to our continued partnership.

“Clinical trial funding insurance is a revolutionary new insurance product that has huge unmet demand and access to Lloyd’s will allow MCI to capitalise on this opportunity.”

Biotech

Biotechnology is the use of biology to develop new products, methods and organisms intended to improve human health.

Founded in 2014, MCI started trading a year later (May 2015) as a manging general agent. In 2021, its syndicate in a box (SIAB) 1902 was approved by Lloyd’s and commenced trading on 1 January 2022.

MCI focuses its underwriting on the life science and healthcare industry.

Asta explained the new  approach would use a new underwriting and technology platform to assess and underwrite what was previously considered to be an exposure “unsuitable” for insurance.

Harfitt said: “It not only greatly reduces the financial risks associated with the clinical trial but also supports growth in the therapeutic drug pipeline.”

“This product is a clear example of what Lloyd’s has to offer society through innovation and technology-enabled underwriting.”