The actuarial profession does not expect any dramatic changes in the insurance industry after the ge...
The actuarial profession does not expect any dramatic changes in the insurance industry after the genetic testing moratorium ends.
The profession, which is attempting to clear confusion regarding the power of DNA-based tests and their impact on the insurance industry, has released a paper, Genetics and Insurance ' Some Social Policy Issues.
The report states: 'Genetic information, where it is actuarially relevant, is little different from other forms of predictive health-care information. Currently there are few actuarially relevant tests which provide predictive info-rmation of this quality.'
Angus Macdonald, professor of actuarial mathematics at Heriot Watt University and co-author of the report, said: 'The predictive value of genetic information is grossly exaggerated, with the exception of a few rare and severe single gene disorders. It is for these that the moratorium applies, but they have generally been known about for years and show up in family history information.'
The report acknowledges a certain degree of adverse selection may take place, but notes it is a feature of any insurance market and that pricing has always taken this into account.
Graham Spittles, chief under-writer at Royal & SunAlliance, and member of the ABI Genetics committee, said: 'Based on today's environment, the report could prove correct and there will be no great changes, post-moratorium. But with developments in science, who knows what tomorrow will bring? There is concern from underwriters over what would happen without family histories. For the critical illness market, lack of family history would result in concerns for its profitability.'
