The UK life sciences sector is a hugely important for the UK. Worth nearly £150 billion in annual turnover and employing more than 350,000 people. Markel’s UK head of life science, Simon Webster says behind this success story, life sciences businesses are grappling with daily risks and operational pressures. 

This is a sector full of opportunity, but it’s also one under intense operational stress. Funding, regulation, supply chains and cyber risk are combining to create real day-to-day challenges. Brokers who understand these issues are better placed to offer meaningful support and build long-term relationships.”

Markel’s 2025 research has revealed the most pressing concerns for businesses operating in biotechnology, life sciences, cosmetics and food supplements. The findings suggest opportunity for brokers but also important risks that need to be addressed.

Supply chains, cyber threats and funding gaps are top concerns

According to the research two risks stand out for those operating in the sector – vulnerabilities in the global supply chain (58.4% of responses) and cybersecurity threats (50%). These are daily challenges for businesses trying to manage international logistics and increasing exposure to digital threats.

Supply chains in the sector are often long, global and complex. From sourcing active pharmaceutical ingredients to distributing finished products, businesses rely on international movement working well. Disruption anywhere in this chain can cause delays, compliance risks or financial loss. And with geopolitical instability and post-Brexit trading complications continuing, the risk of supply chain interruption is a major concern.

Cybersecurity is another pain point. Digital systems underpin everything from research and intellectual property to production and distribution. Life sciences firms are targeted due to the high value of their data and products. If a breach occurs, operations can be affected, sensitive data lost and trust with regulators and customers destroyed.

Half of respondents also said a lack of investment funding would cause either “major disruption” or be “devastating” to their business. With large parts of the sector depending on continuous innovation and scale-up investment, capital is vital. One broker summed it up succinctly: “Securing investment is crucial… life sciences companies rely on fast growth to get their products to market.”

Regulatory complexity and cost pressures

The survey also showed that 42% of respondents see Brexit-related trade complications as a concern. Changing trade agreements, changes in product labelling requirements and delays at borders all add to risk, especially for businesses exporting to the EU, or reliant on components from Europe.

Risks such as these are compounded by the cost of doing business in the sector. Life sciences firms operate in one of the most heavily regulated industries in the world. From early-stage R&D to product launch and post-market scrutiny, the regulatory burden is substantial. As one broker noted: “Constantly changing regulations…regulatory adherence is a primary concern.”

This complexity often forces firms to hire dedicated compliance teams or in-house legal counsel. It’s an overhead that many SMEs in the sector struggle to afford, resulting in a high risk of regulatory mishaps.

The challenge of scaling up

While the sector is expanding, many life sciences companies face difficulties in scaling up their operations, especially to international markets. One broker pointed to “the costs and logistics of scaling up their business” as a key challenge. From securing production capacity to ensuring international regulatory compliance, the road from start-up to commercial success is complex.

Even in fast-growing segments like FemTech and MedTech, brokers flagged underinvestment and a lack of sector-specific support. One broker commented: “In FemTech, I feel there isn’t enough support.”  The sentiment highlights the growing need for insurers and brokers to understand the nuances of sub-sectors, especially as AI-driven innovation challenges traditional regulatory and funding models.

A market ripe for broker-led insight

For insurance brokers, these findings reinforce the importance of specialist knowledge. Understanding how issues like regulatory change, cyber threats or funding bottlenecks impact risk profiles enables brokers to offer strategic support to their clients.

The sector’s unique risks call for tailored protection, policies that address everything from clinical trials liability and IP infringement to cyber recovery and business interruption linked to supply chain failure. Brokers who can match this complexity with strong sector knowledge are in a strong position to support growth-focused firms that need cover as dynamic as their business models.