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The UK life sciences industry is enjoying something of a renaissance following a record injection of capital in 2015. With returns in other markets struggling, investors looked at markets such as biomedical and life sciences, for growth.
Major drivers in consumption for the supplements industry include the increased per-capita income and increased health awareness among people. The ageing population also find it difficult for a body to absorb vitamins directly from food and turn to supplements out of necessity.
Specialist insurer Markel UK is meeting this growth by extending the range of its biomedical and life sciences product to the fast-growing food supplement and cosmetic markets.
Over the last 10 to fifteen years, sales in the global nutrition and supplements market have seen an unprecedented spike, according to the estimates of the Nutrition Business Journal report. Meanwhile, an EY study reveals that the cosmetics market has seen relatively stable growth over the past ten years.
As a result, Markel’s product will now cover businesses that manufacture, distribute and supply products such as vitamins, minerals, food supplements, medical foods, weight management formulas and herbal products. It will also cover a whole variety of cosmetic products ranging from everyday hygiene products, such as cleansers, to beauty products such as lotions, creams and make-up.
“We don’t go into these sectors lightly. We did 12 months of research into the UK sector and found that it’s a growing industry,” said Simon Webster, technical line manager - Biomedical and Life Sciences for Markel UK. “The cosmetics UK market was worth about £8.5bn in retail sales in 2013 and there are about 4,000 companies in Europe seeing an annual growth rate of 5%. The food supplement sector, which is smaller at £2.5bn in retail, is seeing stronger growth at 6.3%.”
According to Webster, supplements and cosmetics are similarly attractive because the manufacturing processes, regulation and application of the two products is very similar to biomedical and life sciences, although they are quite distinct sectors in terms of governance. This can make the markets very profitable as there are plenty of checks and balances in place.
But there is also demand. “Brokers were telling us there wasn’t a specialist insurer in these sectors, so what they wanted was a specialist carrier that brought the underwriter, broker and client together in meeting of minds, so you don’t have any miscommunication of what the risk is,” Webster said.
Markel has been successfully underwriting businesses within these sectors in its US and Canadian operations for over a decade, so feels well placed to understand the potential exposures that are involved.
“It’s very difficult for brokers themselves to specialise in these areas because the volumes aren’t there, so typically they might only have one or two clients that fit this sector. So it can be quite difficult to understand in great detail and develop an expertise themselves,” said Webster.
Markel UK will be offering its products exclusively through the broker distribution channel, and brokers can expect that it’s a predominantly SME and a mainly micro-SME client audience in the biomedical and life sciences sector.
Markel’s biomedical and life sciences policy offers a wide range of protection including public and products liability, professional liability, products financial loss, employers’ liability, property damage and business interruption, directors’ and officers’, entity and transit.
