As globe gallops into vaccine trials, insurers remain unfazed

By Noor Zainab Hussain, Carolyn Cohn and Ludwig Burger

LONDON/FRANKFURT (Reuters) – The world is racing towards a vaccine in record time, stirring public concerns about safety to the extent that nine leading developers have felt compelled to issue a pledge to uphold scientific standards and testing rigor.

Yet, while more than 40 experimental COVID-19 vaccines are being tested on humans, the insurance companies with decades of experience in assessing the risks of clinical trials don’t see anything to be unduly concerned about.

Executives at insurer Allianz and brokers Gallagher and Marsh, among the leading players in clinical trials insurance, told Reuters that premiums had only marginally increased so far in the current pandemic.

They argued there was little structural difference to trials carried out in the past, despite drugmakers around the world competing to shatter the fastest time in history for developing a vaccine, which stands at around four years.

“Rates have been relatively stable. Even this year we have so far seen only moderate price increases on average, with higher price jumps for particularly exposed COVID-19 trials,” said Mark Piazzi, senior underwriter liability at Allianz Global Corporate & Specialty.

This was echoed by David Briggs, managing director, life sciences practice at Gallagher, who said every trial was rated on its methods and the kinds of patients involved.

Gallagher said premiums in Britain, for example, started at about 5,000 pounds ($6,500) per trial.

Total claims limits in policies were typically set at roughly $6-12 million, depending on the country’s rules, according to several insurance companies interviewed by Reuters.

In Britain, for instance, claim limits were usually set at no lower than 5 million pounds, while in Germany the figure was around 10 million euros ($11.8 million).

‘LOSS EXPERIENCE NOT DRAMATIC’

However part of the reason why premiums have not risen as sharply as some people might have expected is that claims from trial are generally uncommon, according to executives. This is because patients have often signed so-called informed consent agreements, they said.

Jim Walters, managing director of Life Sciences & Chemical Group at broker Aon, said such agreements outlined the risks that patients were taking by participating in the trial.

“So, you know, everything from you could have a sore spot on your arm. To you could potentially die. And you know, they would literally go that far in some of these protocols,” he added.

“Those generally tend to hold up in courts and in legal systems around the world. That means that the loss experience coming out of clinical trials is not very dramatic.”

Claims are often limited to circumstances linked to the improper conduct of trials or any wrongdoing, rather than side-effects of the treatment, executives said.

Such have been the worries about the vaccine race among some members of the public, who fear safety standards could slip, that nine developers issued a joint pledge last month to “uphold the integrity of the scientific process”.

ASTRAZENECA TRIAL SUSPENSION

AstraZeneca and Oxford University’s suspension of global Phase III trials of their experimental COVID-19 vaccine early last month due to a participant’s illness brought the risk of side effects in clinical trials to the public fore.

But the insurers said such delays were not unexpected, and could even reflect the extra caution of vaccine developers given the lack of data about COVID-19.

“Side effects always happen with clinical trials, but these are typically mild and expected. It is not very common to delay or suspend trials, it does happen though,” said Piazzi at AGCS, whose main peers in underwriting trials include Chubb, HDI and Fairfax’s Newline.

“Pharma companies and insurers alike are even more careful than usual with COVID-19 trials because there is so much at stake, particularly for the patients’ safety.”

All trials of the vaccine candidate have resumed, with the exception of the U.S. study.

There have been examples in recent memory of drug trials going catastrophically wrong, though.

In 2016, for instance, one participant died and five were hospitalized in a Phase I trial run by French company Biotrial in the city of Rennes, testing an experimental mood brightener made by Portuguese drugmaker Bial.

In 2006, six patients required intensive care after receiving a potential treatment against leukemia and auto-immune disease in London. One was described as looking like “the elephant man” after his head swelled. Another lost fingertips and toes. Germany’s TeGenero, the initial developer of the medicine, folded.

But insurance executives stress such disasters are rare, given the thousands of clinical drug trials being carried out every year.

Walters of Aon, speaking about the 2016 trial, said it was “obviously a horrible situation”.

“But that’s one of very few incidents of really bad loss experience that the industry has faced. So, clinical trial insurance is not hugely expensive. Let’s put it that way.”

(Reporting by Noor Zainab Hussain, Carolyn Cohn and Ludwig Burger; Editing by Pravin Char)

Allstate to return $600 million in auto premiums to customers as pandemic cuts driving

By Suzanne Barlyn

(Reuters) – U.S. insurer Allstate Corp  said on Monday that it would return more than $600 million in auto insurance premiums to customers as many Americans stay home and drive less due to “shelter-in-place” orders to curb the coronavirus outbreak.

Most customers will receive a “payback” of 15% of their monthly premium in April and May, the company said.

A smaller U.S. auto insurer, American Family Insurance in Madison, Wisconsin, also said on Monday that it would return a total of $200 million to auto insurance customers beginning in mid-April. Customers will receive $50 per vehicle covered by their policies, the company said.

“There are very few silver linings out there, but auto insurance companies are definitely one of them,” said Piper Sandler analyst Paul Newsome about coronavirus.

Fewer accidents generally lead to a lower claim frequency and Newsome expects insurance companies with large auto portfolios, such as Progressive Corp <PGR.N>, Travelers Companies Inc <TRV.N> and Allstate, to post good first quarter results.

The payments show how coronavirus could provide a silver lining for at least one industry – auto insurance companies – as more drivers stay off the roads.

Allstate’s payback, which will apply to 18 million policies issued by Allstate and its Esurance and Encompass units, follows a data analysis by the insurer of 23 million cars that showed driving mileage being down between 35% and 50% in most states, Allstate Chief Executive Officer Tom Wilson said during a call with reporters on Monday.

The analysis, based partly on data that Allstate collects from tracking products that some customers agree to use in exchange for discounts, and other sources,

Allstate’s data showed no difference between states that had “shelter in place” orders in effect and those that did not, Wilson said.

Still, some people who are still on the roads are driving faster on what are now less densely traveled roads, which could lead to more serious accidents, Wilson said.

Next Insurance, a commercial insurer in Palo Alto, California that covers small businesses also on Monday said that it would discount April commercial auto premiums by 25% because “stay at home” orders have reduced the insurers’ risks.

(Reporting by Suzanne Barlyn; Additional reporting by Tina Bellon; Editing by Steve Orlofsky and Marguerita Choy)

Soaring costs, loss of benefits top Americans’ healthcare worries: Reuters/Ipsos poll

An examination room is seen at an onsite health clinic at the Intel corporate campus in Hillsboro, Oregon, U.S., April 25, 2018. REUTERS/Caroline Humer

By Maria Caspani

(Reuters) – For over a year now, Americans have listed healthcare as the most important problem facing the country, according to Reuters/Ipsos polling.

When asked what concerns them about U.S. healthcare, this is what they had to say:

TOTAL COST OF HEALTH INSURANCE

Sixty-five percent of Americans said in the poll that they are “very concerned” about the overall cost of health insurance, including premiums, deductibles and copays.

This concern is consistent throughout the country: A majority of both millennials and baby boomers, whites and minorities, Democrats and Republicans were worried about healthcare costs.

PRESCRIPTION DRUGS

Nearly three in four Americans use prescription drugs, and 58 percent said they are “very concerned” about the cost of paying for them, according to the Reuters/Ipsos poll. These drugs are expected to see the fastest annual growth over the next decade, rising an average of 6.3 percent per year, according to the U.S. Centers for Medicare and Medicaid Services (CMS).

CHOOSING CARE

Sixty-six percent of U.S. adults who took part in the survey said they were concerned about their ability to see a doctor of their choice going forward.

MEDICARE AND MEDICAID

About one in three U.S. adults said they were “very concerned” about losing benefits from government-run programs Medicare and Medicaid.

Enrollment in Medicare is expected to increase as baby-boomers reach retirement age, according to CMS projections, which will contribute to growing healthcare spending.

The poll also showed that 58 percent of Americans think Congress should keep the Affordable Care Act either entirely as it is, or with some fixes, while 24 percent think lawmakers should repeal it once an alternative law is passed and 18 percent want the ACA to be repealed immediately.

The Reuters/Ipsos poll surveyed 3,982 people in English in the United States from May 22 to June 3 and it has a credibility interval of about 2 percentage points.

For more Reuters polling, visit http://polling.reuters.com/

(Reporting by Maria Caspani, Editing by Chris Kahn and Chizu Nomiyama)