Genomics is transforming medicine, and slowly but inevitably will be reshaping insurance. It was only a matter of time…
The secrets once buried deep, hidden in the paired strands of DNA every person carries. The mysteries of the genome (an individual’s complete set of DNA) remained veiled when the Human Genome Project began, which was an international scientific research project with the goal of determining the sequence of nucleotides that made up the human DNA. Then in 2003, the international research project completed its mission, sequencing the genome.
This rapidly advancing science in forcing the insurance industry to navigate a multitude of actuarial, ethical, privacy and even reputational concerns.
The fundamental business models for life, disability, critical illness, and long-term care insurers could be at stake, given the growing existential threat of information as more people buy insurance, without disclosing their predisposition to certain diseases.
Genomics just may become the greatest disruptor to the insurance industry, the equivalent to global warming, or cybersecurity risks in the property/casualty space.
The sequencing of the human genome, DNA genetic testing (such as 23andMe), and genome editing are changing the way of how we are detecting diseases early on, treatment and even prevention through precision medicine. However, genetic testing companies are in line to influence everything from how insurance is underwritten and priced to how products are designed.
The Rise of DNA Testing
Take, 23andMe for example, which offers risk reports for multiple diseases, providing the public with intimate genetic information. Those who test positive to a serious predisposed illness could buy more coverage than they need and at an unpriced rate. And, those who test negative, could delay purchasing insurance coverage, or allow their policies to expire.
According to Nabholz, Swiss Re’s head of research and development, life and health “more than 12 million people have taken direct-to-consumer DNA tests, with almost 8 million of those tests occurring since 2016.”
“People who get a genetic test back that is unfavorable, of course, they’re going to seek to protect themselves and their family,” Nabholz goes on to say. “That’s a natural reaction.”
But, insurers will have to move cautiously. The science is relatively immature. The regulatory landscape remains uncertain with at least one state proposing a ban on using genetic information to underwrite life policies.
And then there is the matter of privacy, data ownership, and media coverage concern that would follow the rejection of applicants due to gene mutations or variants. The questions that are unanswered are as frequent as the questions yet asked.
One thing is certain: genetic testing will open doors to longevity, healthcare, prevention, and screening, and will ultimately lead to us leading healthier and longer lives.