A move to lower risk environments signals optimism for the healthcare industry
If business leaders’ predictions are to be believed, an increasing number of healthcare and life sciences organisations are soon going to find themselves operating in medium and low risk environments. This is great news for the industry.
Striking an optimal balance between fear of staying stagnant and not being afraid to act, a market that is operating predominantly in a medium risk environment is a market that is poised for innovation and product development. Technology is what facilitates this evolution. That so many healthcare and life sciences executives see their organisations migrating to this category speaks well to an optimistic direction ahead for the industry, and to greater integration of technology into every facet of the healthcare and life sciences sector ahead.
Executive perception that risk will moderate itself to a comforting level in the coming months signals a sense of optimism that is great for the industry. This optimism stands to spur innovation and growth as healthcare and life science organisations embrace and think positively about technology."
Explore what a medium or low risk environment means for healthcare and life sciences organisations.
The life sciences sector has always prioritised technology and tech-driven solutions. But with the integration of advanced data and the potential for its use, organisations of every size and risk profile are now starting to consider the potential of AI and other emerging technologies. Executives are recognising that organisations that seek ways to use these platforms to enhance their capabilities or to operate more effectively will ultimately be the winners in this space – and they are leaning into the opportunity.
From our perspective as underwriters, we see advances in generative Artificial Intelligence (AI) modeling accelerating drug development and driving down costs by making it possible to identify molecules that will react better right out of the gate. Where once the research and testing of new pharmaceutical compounds began with hundreds of potential candidates, today they can whittle the list down to only a handful using data analytics. It is entirely possible that we will observe companies in the pharmaceutical realm becoming entirely digital due to AI modeling. Similarly, medical device firms are harnessing the advancements in data analytics in the fields of 3D printing, diagnostic assistance, robotic surgery, and others, ushering in transformative shifts in the market. Every facet of the life sciences industry is poised to evolve because of technology.
As fear of technology subsides, adoption rises, and optimism for modern risk begins to fuel the healthcare industry, each organisation must now ask themselves how they want to capitalise on this opportunity – and how to mitigate the resulting risks.
For instance, studies have shown that AI can analyse breast samples with an accuracy even greater than human radiologists in detecting cancer¹. Thus, hospitals or health systems can reduce the risk of misdiagnosis by incorporating AI into their screening procedures. At the same time, integration of AI comes with its own set of challenges. Too much reliance on AI technology may lead to less training opportunities for staff or even less availability of radiologists over time – and a breach or a system outage could then leave that same facility with no backup. This raises new questions. What would the reasonable radiologist do? Will there be a new standard of care for AI diagnosis vs. physician diagnoses? The shift we see in executive perception of risk reflects these changing variables.
Coming out of the pandemic, the market is increasingly focused on technology integration, and it’s important to recognise that this shift may bring risks that are different to those faced historically. These new risks are not something to be feared, but rather to be embraced so they can be mitigated and understood."
As a specialist carrier with deep experience in cyber, Beazley is well-positioned to take this journey with policyholders. We recognise the evolution of the industry and are taking positive steps to be ahead of the curve, developing products that integrate technology and cyber risks affirmatively. With so many variables at play, our deep product understanding and ability to consider the cyber and AI aspects of risk enable us to offer dynamic global solutions that meet the needs of our clients at every level of risk environment.
The information set forth in this document is intended as general risk management information. It is made available with the understanding that Beazley does not render legal services or advice. Although reasonable care has been taken in preparing the information set forth in this document, Beazley accepts no responsibility for any errors it may contain or for any losses allegedly attributable to this information.
Executive perception that risk will moderate itself to a comforting level in the coming months signals a sense of optimism that is great for the industry. This optimism stands to spur innovation and growth as healthcare and life science organisations embrace and think positively about technology."
