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11th February 2024
Asta-managed SIAB receives Lloyd’s ‘in-principle’ approval to deliver innovative clinical trial funding insurance
Asta, through its leading third-party managing agency at Lloyd’s, has announced the “in-principle” approval of an innovative syndicate-in-a-box(SIAB) to deliver a breakthrough insurance product that will accelerate the development of new therapeutic drugs. MCI Syndicate 1966, supplemented by Lloyd’s consortia, is targeting commencing underwriting from April 2024 with a forecast annual gross premium written for 2024 of £75m, subject to the necessary final checks and processes from Lloyd’s.
Syndicate 1966 will introduce to the biotech industry an innovative product that insures clinical trial funding in the event a trial fails. Such an approach will use a new underwriting methodology and technology platform to assess and underwrite what was previously considered to be an exposure unsuitable for insurance. By insuring biotech companies against risks inherent in medical innovation and research, it not only greatly reduces the financial risks associated with the clinical trial but also supports growth in the therapeutic drug pipeline.
Historically, clinical trial financing can present a high risk / high reward endeavour for biotech entrepreneurs, investors, and innovators. Such individuals and entities can find it difficult to secure adequate funding for their therapeutics without significantly diluting equity and compromising control of their concept/molecule. In addition, lenders and structured finance providers have historically had a lower appetite for the area, compared with other industries. Supported by TJP economic consulting as concept innovator, MCI’s insurance product is designed to encourage both lending/structured finance in an innovator-led model, as well as traditional VC investment, to the ultimate benefit of biotech researchers.
Lorraine Harfitt, ceo 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. This product is a clear example of what Lloyd’s has to offer society through innovation and technology-enabled underwriting.”
Phil Trafford, ceo of MCI, added: “Working side-by-side with lenders and investors, this new syndicate-in-a-box will promote medical innovation whilst also bringing new accretive and profitable business to the Lloyd’s market. We are grateful for the guidance provided by Asta whose experience in bringing new ideas to Lloyd’s has made the whole process quick and efficient.”
Established in 2014, MCI commenced trading in May 2015 as an MGA, and in 2021, MCI’s SIAB 1902 was approved at Lloyd’s, with trading commencing at 1 Jan 2022. MCI focuses heavily within the life science and healthcare industry sector, with a successful track record of converting academic/industry experts into underwriters.
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