Source: asiainsurancereview.com

Genetic testing can be a powerful tool for insurers – potentially allowing them to price risk better. But it also carries with it some potential risks, if applied indiscriminately.

Genetic testing can predict just how predisposed a person is to getting certain types of critical illnesses and other genetic conditions. Having this information can allow a person to take preventive measures that might reduce healthcare costs of treating diseases in the future.

“Genetic testing can also lead to improved disease prognostication in clinical practice and better risk stratification for insurers underwriting those who have already developed a disease with a genetic component,” said a report by RGA published last year. “It can also mitigate drug side effects and optimise medical therapies in cases where medicines and therapies have a genetic component.” The RGA report suggests that it can be incorporated into products to be used when claims are made to improve clinical case management, avoid drug side effects and reduce case fatality numbers.

At the same time, genetic testing also brings with it the risk of discrimination. With such information at their disposal, the worry is that insurers could price out or deny/limit coverage to people who are genetically more predisposed to certain conditions.

To avert such a scenario, proper guidelines on the use of genetic testing is required. And while regulations around genetic testing are still in its nascent stages, discussions are taking place around the world on how it should be introduced. “For an insurer, offering genetic testing to a policy owner could result in negative reputational impact and potential legal challenges if the insurer is perceived to be misusing test results or if insurers select genetic testing services that either cannot deliver or that produce inaccurate results (analytical validity),” said the report. Insurers will also have to pay heed to the reputational risks they take on should they choose to make genetic testing a part of their portfolio.