Women's health startups face barriers to growth and insurance

What's stalling investment in this sector?

Women's health startups face barriers to growth and insurance

Insurance News

By Gia Snape

“Femtech” – technology solutions tailored for women’s health and well-being –

 remains a small segment in the global health technology market, but it is poised for explosive growth.

Currently valued at around US$28 billion, the femtech sector is estimated to reach US$60 billion by 2027, according to a report by The Guardian. Despite this, investment in femtech is only at around 1-2% of global health technology funding.

Insurance has also complicated matters. A survey by Tokio Marine Kiln (TMK) revealed three-quarters (76%) of female health technology founders have struggled to get insurance, inhibiting their growth.

TMK interviewed dozens of female health founders to produce a new report on the sector and reported that startups in the space face a “triple threat” of insurance, investment, and digital censorship.

For Kirsten Shastri (pictured), head of life sciences at TMK, the sector’s growth represents a call to action for the insurance industry.

“If we’ve gone through a pandemic and successfully developed brand-new vaccines in nine months, why not continue that innovation and focus on female health?” she said.

What’s curtailing investment in women’s health technology?

Startups in the women’s health sector face unique challenges. While all startups grapple with proving their viability, these businesses encounter additional barriers tied to the nature of their products and their target audience.

“If the majority of investors are male, and you have a sanitary product in your hands, they’re not likely to understand how it works,” Shastri pointed out.

She stressed that this disconnect is less about bias and more about a lack of familiarity. "I think the focus on female health highlights a major gap: we just don't have enough data," she explained.

"Historically, research has been slow to include women in clinical trials, and that’s left us without a foundation of facts and figures. When it comes to innovation in female health, it's difficult to understand or evaluate because there’s nothing to compare it to—it’s uncharted territory."

For conditions like endometriosis, which affects one in four women, the medical community still lacks fundamental understanding. “When a company focuses on developing products to manage endometriosis pain, there’s no baseline,” Shastri continued. “It’s hard to convey the need for investment and explain the risks to insurers.”

The lack of investment in women’s health perpetuates a vicious cycle. “If we don’t push forward for more research, we don’t get that data,” Shastri said.

The role of insurance in women’s health innovation

TMK’s findings, based on one-to-one interviews with 47 founders of femhealth businesses, showed more than half of the participants (56%) said the cost of insurance was prohibitive, in addition to 51% who said the process was complex. 

More than a third said broker and underwriter understanding of the specific and unique risks of this sector (42% and 39% respectively) was a barrier. Some 39% also said underwriters had no appetite for these risks, while 34% said they faced challenging exclusions in their policies.

Simply put, many insurance policies targeting health startups aren’t fit for purpose. "Companies might hold on to exclusions that were added 20 years ago, and they’re hesitant to remove them. As a result, some businesses might get coverage, but it’s inadequate for their actual needs,” Shastri said.

To help reduce complexity for this niche segment, TMK has launched a bespoke life sciences insurance product that covers life sciences liability risks together with cyber and IP under one policy. The product covers a range of sectors from femhealth to biotechnology, pharmaceuticals, smart medical devices and telemedicine, and aims to simplify the insurance process for businesses and reduce the risk of coverage gaps. 

Brokers also have an important role in supporting the growth of the women’s health technology sector by guiding startup founders and providing honest feedback on the insurance coverage they need.

“That means equipping them with the tools they need - sharing statistics, identifying the barriers they face, and connecting them with markets that can help,” Shastri said. “(Founders’) focus should be on building a revolutionary product in the women’s health space, not deciphering insurance. Our job is to collaborate and make sure they have the right coverage so they can concentrate on what matters most."

The future of women’s health startups

Despite the challenges, Shastri remains optimistic about the future of women’s health startups. She’s particularly excited about the potential of artificial intelligence in cancer or fertility treatments.

“There are amazing innovations driving progress in women’s health science like AI being used in cancer screening, or IVF, or even repurposing drugs that have been dormant for decades to save lives today,” she said.

While Shastri’s team isn’t on the frontlines performing surgeries or developing treatments, their role in providing insurance is vital. For the Tokio Marine Kiln leader, watching startups navigate the hurdles of clinical trials and eventually bring their products to market is a source of pride.

“It’s rewarding to make insurance one less challenge for these companies,” Shastri said. “We’re there when things go wrong. We’re the safety in the background.”

Do you have something to say about women’s health startups and their barriers to insurance? Please share a comment below.

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