Marsh and Munich Re Launch Unique Business Interruption Insurance Solution
New York | September 23, 2015
Life Science Companies Facing Increased Regulatory Risk
Marsh, a global leader in insurance broking and risk management, and Munich Re, the A+ rated global (re)insurer, announced today the availability of a new non-damage business interruption insurance (NDBI) solution that combines risk transfer and consulting services to assist life sciences companies in managing the impact of regulatory actions imposed by the US Food and Drug Administration (FDA).
The FDA and its international counterparts are more closely scrutinizing life sciences companies today through planned and unplanned inspections to ensure current good manufacturing processes (cGMP) are being followed. When these inspections result in a suspension of manufacturing, whether voluntary or enforced, the resulting costs are not typically covered by traditional business interruption insurance policies since they are not the result of physical damage to the insured’s property.
To fill this void, Marsh and Munich Re developed NDBI Pharma IQ. The policy offers life sciences companies that suspend their manufacturing and distribution due to a cGMP violation, up to $10 million in aggregate non-damage business interruption and extra expense coverage for up to 10 manufacturing locations, including those owned by third parties.
Unique to NDBI Pharma IQ are complimentary risk assessment and quantification services supported by Marsh Risk Consulting’s forensic accounting, business continuity, and property risk experts. Insureds are provided 60 hours of consulting services to aid in the assessment and management of their supply chain exposures to potential FDA regulatory actions.
NDBI Pharma IQ is only available through Marsh and Munich Re. Additional insurance capacity and consulting services are available as needed.
“A regulatory action that ultimately leads to an enforced suspension of manufacturing and distribution can cost a life sciences company millions of dollars in remediation, reputational damage, and lost income,” said Doug Carey, Marsh’s US Life Sciences Practice leader. “With NDBI Pharma IQ, these companies now have a cost-effective way to better assess and measure these risks and lessen the financial impact of a regulatory action so they can more quickly return to normal operations.”
Claudia Hasse, head of Special Enterprise Risks at Munich Re, added: “NDBI Pharma IQ was created to address an uninsured need – the impact of financial losses resulting from suspension of production following regulatory enforcement. The cover was developed after extensive research into the pharmaceutical industry and following many discussions with risk managers, whose needs have been reflected in the product offering. Thus it is a valuable insurance option designed to complement companies' risk management strategies.”
More information about NDBI Pharma IQ can be found in this brochure.
About Munich Re
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. In the financial year 2014, the Group – which combines primary insurance and reinsurance under one roof – achieved a profit of €3.2bn on premium income of over €48bn. It operates in all lines of insurance, with over 43,000 employees throughout the world. With premium income of around €27bn from reinsurance alone, it is one of the world’s leading reinsurers. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. Its primary insurance operations are concentrated mainly in the ERGO Insurance Group, one of the leading insurance groups in Germany and Europe. In 2014, ERGO posted premium income of €18bn. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand. Munich Re’s global investments amounting to €227bn are managed by MEAG, which also makes its competence available to private and institutional investors outside the Group.
Marsh is the world’s leading insurance broker and risk adviser. With over 35,000 colleagues operating in more than 130 countries, Marsh serves commercial and individual clients with data driven risk solutions and advisory services. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With annual revenue over US$15 billion and 75,000 colleagues worldwide, MMC helps clients navigate an increasingly dynamic and complex environment through four market-leading firms: Marsh, Guy Carpenter, Mercer, and Oliver Wyman. Follow Marsh on Twitter @MarshGlobal; LinkedIn; Facebook; and YouTube, or subscribe to BRINK.