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Genes and the insurance industry

There has been no shortage of comment on the likely impact of genetics on the insurance industry, but precious little research into behaviours, experience and attitudes. A new research project will provide valuable information.

People applying for life assurance or critical illness cover have to fill in detailed forms asking about their health - and that of their parents and siblings - as well as about smoking and drinking habits, and dangerous pastimes. What insurance companies are not currently allowed to ask about are genetic tests, which might reveal whether applicants have genetic mutations likely to put them at high risk of developing particular diseases.

This ban is the result of a moratorium agreed between the Government and the Association of British Insurers, on the use of DNA genetic test results by insurers, except in cases where very large sums are involved. It will run until October 2006, giving the public, the Government and the insurance industry a breathing space to work out what tests the industry should be allowed to take into account - if any.

Of particular concern to the insurance industry is the possibility that people who have had genetic tests may take out large amounts of insurance, while concealing results that show that they are at high risk of developing a disease. This phenomenon is known in the industry as ‘adverse selection’.

To date, little research has been done in the UK to find out how the availability of genetic tests influences whether people buy insurance and how much cover they take out. With funding from the Wellcome Trust’s Biomedical Ethics Programme, a team comprising two clinical geneticists, a social scientist and an actuarial scientist now hopes to fill in some of the gaps.

Taking issues

"The debate on genetics and insurance has been long on rhetoric and short on evidence," says Peter Harper, Professor of Medical Genetics at the Institute of Medical Genetics in Cardiff, Wales. "It is clear to me that there are very few diseases where adverse selection could be a real issue, because most inherited diseases have an early onset and are obvious by the time someone reaches adulthood. Many others that have a late onset do not actually kill people, so are not very relevant to life insurance, while other tests are done because people want to know if they are carriers of a disease when they want to start a family, which again is not very relevant to this problem."

Together with Dr Lindsay Prior, Reader in Sociology at Cardiff University, Angus Macdonald, Professor of Actuarial Mathematics at Heriot-Watt University in Edinburgh, Scotland, and Dr Jonathan Gray, Consultant in Medical Genetics (Cancer), also at the Institute of Medical Genetics in Cardiff, Professor Harper set out to design a study that would provide some basic evidence on the potential impact of genetic testing on insurance costs, and the interaction between genetic testing and insurance buying.

According to Dr Prior, "The question is, how do people perceive the risks, and what do they do about it? This is an important issue for patients, whose lives it directly affects, and for clinicians, who fear that the insurance industry’s attitude may put their patients off getting tested, and for the insurance industry, who are concerned about adverse selection."

To obtain the data they need, Dr Prior and colleagues are taking a three-pronged approach. First, they will extract anonymous data from records of pedigrees held at the Institute of Medical Genetics. The families selected are affected by Huntington’s disease, adult polycystic kidney disease, familial adenomatous polyposis and familial breast cancer.

The diseases have been chosen carefully. They are all inherited conditions that develop only in adult life. Professor Harper says: "In the case of Huntington’s disease, which is usually fatal, the consequences of knowing whether you carry the harmful gene are enormous. Many people say they do not even want their GP to know in case their notes are handed over to an insurance company."

Dr Gray points out that the situation with familial adenomatous polyposis, which leads to colon cancer, is rather different. "This condition is highly treatable if caught early, so there is an overwhelming benefit for patients in knowing if they have the mutation. Many professionals are concerned that their cancer prevention programmes could be ruined, if people are put off having the test for fear that the result may have to be declared to insurers. This would work to everyone’s disadvantage, including the insurance industry’s."

Using the anonymous data from the pedigrees, Professor Macdonald will construct an actuarial model that will make it possible to estimate what scope there is for adverse selection in the study population. "The aim is to set up some mathematical models of the kind used by actuaries when pricing insurance, and then add in various quantitative risks of the kind that genetic information might reveal. It will then be possible to work out how that information would affect insurance claims and therefore insurance premiums."

Buying behaviour

For the second section of the study, the researchers will choose a sample of adults from the pedigree data who will be asked about their views and their behaviour when it comes to insurance buying, including information on what policies they have already obtained.

"We will be asking them for documentation about their current insurance," says Prior, "which will show when they took the policies out. So if they took it out after they visited the clinic, that would be pretty good evidence that they are using the clinical evidence to alter their insurance-buying behaviour. But if those policies were all taken out well before any contact with the genetics clinic, it would be reasonable to assume that awareness of genetic risk had no influence."

Once this part of the study has been completed, says Dr Prior, "we should know whether people can adversely select against insurance companies and, secondly, whether they do".

The final part of the project will involve interviewing underwriters and actuaries from the 11 insurance companies who gave evidence to the House of Commons Science and Technology Committee on Genetics and Insurance. "We want to try to get an image of the problems from their point of view," says Dr Prior. "This should enable us to focus our actuarial and statistical results directly on their concerns, and on the responses they made to the Select Committee."

Cans and Can’ts, Dos and Don’ts

In its report on genetics and insurance published in March 2001, the House of Commons Select Committee on Science and Technology concluded that the insurance industry had failed to give the public "clear and straightforward information" about its policy on the use of genetic tests results. Insurers, the committee said, appeared to have been "far more interested in establishing their future right to use genetic test results in assessing premiums, than in whether or not they are reliable or relevant".

The committee called for a voluntary moratorium on the use of all positive genetic test results by insurers for at least two years. During this time, it said, more research should be done to establish the actuarial and scientific relevance of genetic test results to the assessment of premiums, and the possible consequences for research and healthcare.

Also in 2001, the Human Genetics Commission, which is the Government’s advisory body on how new developments in human genetics will impact on people and on healthcare, likewise recommended a moratorium lasting at least three years. It said it would also want to address the issue of how information about family history is used by insurers during the period of the moratorium.

The moratorium was agreed between the Government and the Association of British Insurers in October 2001. It allows people to obtain up to £500 000 of life insurance and £300 000 of critical illness, income protection and long-term care insurance, without having to disclose any genetic test results.

Speaking in October 2001, Mary Francis, Director General of the Association of British Insurers, said: "This agreement will enable us to have a rational and informed discussion about the best way forward for the UK on genetics and insurance...there is a complex web of issues to consider, including the principle that insurance companies should have access to the same information as applicants."

External links

Dr Lindsay Prior at Cardiff University School of Social Sciences: Research interests

Professor Angus Macdonald at the Department of Actuarial Mathematics and Statistics, Heriot-Watt University: Research interests

Loading the dice

Genes and the insurance industry

Taking issues

Buying behaviour

External links

Further reading