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  • November 2020
  • 10 minutes

Genetics and Insurance in the Genetic Moratorium Era

  • Dipali Jawalkar
  • Dr. Heather M. Lund
  • Dr. Summer Zhu
  • John Cardus
  • Neill Muller
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In Brief

RGA Hong Kong and the RGA Asia Pacific regional team explore recent innovations in genetic testing and provide guidance on how insurers can prepare for and adapt to changes on the horizon in the genetic moratorium era.


What do current genetics trends, testing advances, and medical applications mean for the insurance industry? How can insurers prepare now to address potential challenges, adapt to the changes, and harness the opportunities within the context of medical advancement, growing consumer awareness, ethical and privacy considerations, and regulatory environments?

Advances in Genetic Testing

Today, through breakthrough technologies, the human genome can be analyzed for information, primarily in the form of genetic variations or mutations observed. These variations or mutations can impact both how we look on the outside and function on the inside, providing important insights into our risk for diseases or disability. Modern research and development capabilities allow experts to gather and evaluate genetic information for potential disease diagnosis or prevention – in some cases even before birth.

Technologies like whole genome sequencing (WGS) could identify variations in the entire genome. Genetic products now on the market provide information about genetic variations for more than 150 hereditary diseases, including more than 30 cancers and 80 common diseases like stroke and heart disease, as well as the impact of genetics on diet, medication, skin health, fitness, to name a few. Health-related information can help not only diagnose disorders but even determine an individual’s risk of developing a condition or disease in the future, even in absence of symptoms.

Governments and research bodies have developed genome projects to provide dedicated and focused support for genetic research. As an example, the Hong Kong government is about to kick-start a genome project in 2021. Phase one of the project will invite 10,000 patients with suspected or diagnosed disorders to undergo genetic testing. In phase two, 20,000 family members of the patients will be invited, whether symptomatic or asymptomatic, to take part in genetic testing. Participating patients and family members will undergo extensive genetic sequencing, which can help provide data for research to improve diagnosis and treatment now and in the future.

Access to this information has accelerated research and development for treatment, prevention, and wellness strategies.

RGA believes that genomics, genetic testing, and precision medicine are likely to play an increasingly significant role in patient care and disease prognostication that could lead to improvements in morbidity and mortality. However, the progress in the field of genetics brings both opportunities and challenges, some of which are unique to insurance.

Genetic Information Collection and Usage

Until a few years ago, genetic tests were primarily performed on medical advice. The tests were, and continue to be, performed for a reason in clearly affected individuals, maximizing the likelihood of identifying a pathological variant. This could be either to confirm a clinical diagnosis in someone highly suspected to have or even having already been diagnosed with a disease or to identify a possible genetic cause of a condition that has a wide range of possible causes, a genetic cause being just one of them, i.e., in a child with developmental delay. In the latter scenario, the pre-test probability of a specific finding is much lower. Before recommending the test, the clinician assesses circumstances such as younger-onset disease, family history, and also which test should be advised, e.g., exome sequencing, single gene, or gene panel. The reporting of genetic tests in clinical labs follows a standardized structure and focuses on possible disease risk and lists any variants (deviations from the reference DNA) identified into five categories, which are suitable for clinical interpretation. The classification is based on an algorithm that assesses available information based on existing variant databases and scientific literature, that correlate with proven or highly probable gene-disease associations. Clinical labs report variant classifications, not diagnoses. A genetic test must always be interpreted in context, which is feasible and easily applicable in the clinical space.

These thorough clinical considerations can lead to a management plan based on the test findings. Throughout the process, counselling is generally provided to help with interpretation and provide support for handling genetic information.

Direct-to-Consumer (DTC) testing, generally does not utilize the clinical principles outlined above. Individuals with or without signs and symptoms of disease now have easy access to a range of genetic tests, including comprehensive evaluations, through DTC testing. The ease of undergoing the tests (even in one’s own house), convenient and quick access, digital reports, and low costs have caught consumers’ attention, and the sales of DTC genetic tests continue to increase. The gaps in terms of recommendations, counselling, non-standardized format of reporting, and low or nil analytical or clinical validity and utility of the outcome’s present significant challenges.

From an insurance perspective, key differences between genetic tests and other diagnostic tests are the regulations applicable to genetic testing, and the complexities of test outcomes and application. In many parts of the world, insurers are subject to regulations around access and use of genetic test information known to individuals at the time of insurance purchase. Hong Kong, for example, has instituted a proactive moratorium as well as best practices self-determined by the industry via the Hong Kong Federation of Insurers. Furthermore, in some markets insurers cannot utilize genetic information at all including family history. RGA supports and has been actively involved in developing the moratoriums and best practices in various markets, including a structure based on strong principles of reliable testing, robust statistical evidence, high impact on insurance, duration of asymptomatic period, and potential for future developments.

Risk Assessment and Selection Considerations

Underlying motivations for undergoing genetic tests, how genetic testing is carried out, and how the information is handled within the context of insurance have the potential to impact products, markets, and operations. Keep in mind that DTC products collect and store important information, such as disease risks, cancer risks beyond ancestry, and pharmacogenomic data. The potential impact could be amplified by the gaps in the DTC ecosystem highlighted above, which can impact both consumer sentiment and behavior.

DTC test findings and how these are communicated may widen information asymmetry due to limitations of insurance application forms and moratoriums. In other words, applicants may know more about their potential health risks than insurers, which could result in increased anti-selection.

Given that findings might lack clinical validity and utility, such tests will not necessarily equip the person being tested with knowledge of whether the genetic variant identified is related to the presence or absence of risk of a specific disease. Whether the disorder or disease will manifest, when it will manifest, how severe the symptoms will be, and how it will progress over time remain unknown. As a result, medical professionals cannot develop a management plan to prevent or delay disease onset. In some cases, it could take decades to develop effective treatment and preventive protocols, and for some it may never happen.

To gather insights about different DTC tests and consumer reaction to test outcomes, some RGA associates underwent DTC tests and took part in a series of surveys and interviews before and after the tests. The research uncovered concerns regarding targeted insurance purchases and increased insurance purchases based on the DTC result outcome.

How genetic information will be used by people, especially those currently in good health, is challenging to predict, resulting in wider risk considerations. Whether people improve behavior through lifestyle changes and use genetic information to purchase more insurance cover are important areas of research closely monitored by the RGA behavioral science team.

Overall, mortality and morbidity influence due to access to genetic information, anti-selection, and lapsation trends will take time to determine. However, these considerations have to be acknowledged and addressed in various operational processes and market-wide impact.

Impact on Day-to-day Operations

Day-to-day insurance operations are also likely to be affected by increased genetic testing. Although the moratorium threshold in most countries has been set to ensure the bulk of insurance policies can be accommodated below certain limits, insurers have to be conscious since diagnostic tests can be utilized below the moratorium limits, and applicants may be allowed to share genetic information for better insurance offers. Therefore, insurers need to start preparing for the adoption and application of best practices around how genetic information is collected, made available, and applied.

When applying changes to application forms to comply with the moratorium and regulatory framework, insurers could follow a more proactive, informative, or even a passive approach when collecting genetic information at the application stage for evaluation. A proactive approach is easier for customers to understand, but insurers will need to evaluate it in the perspective of the entire operation. Insurers should also consider whether consumers have sufficient education to filter genetic information provided to the insurer as per the moratorium requirements, and how industry standardization and regulation of data collection will impact the process of application form evaluation. The impact of these changes on common practices will have to be assessed.

Genetic test reporting could differ based on various regulations, e.g., Hong Kong insurers need to establish whether the test falls under a predictive or diagnostic test. The same genetic test can be predictive or diagnostic depending on who is taking the test, why they are taking it, and what it is going to be used for. As this information is not included in genetic reports, it will require adequate process enhancements in order to gather the necessary supporting information required. Based on the broader context, applications will have to be evaluated on a case-by-case basis.

Another variable to address is going to be the adjudication of moratorium limits. Many markets, including Hong Kong, have moratorium limits set per life. It will be important to examine aggregation mechanisms to find out whether limits should apply per company, or per life across the wider industry, while developing new processes.

Utilizing the genetic information to deliver appropriate underwriting decisions and claims outcomes is another important consideration. It is incumbent on insurers to demonstrate proficiency and research-based documentation if any genetic test result is used in risk assessment and claims adjudication. Similarly, insurers should also consider mitigating interventions that a proposed insured is undertaking in order to reduce disease risk. Due to limited information, lack of long-term studies, technical considerations which may be unknown to underwriters today, the process may be complex at first. Risk assessment outcomes could be dynamic over time as new information comes to light. Insurers will also need to keep abreast of progress in the field of genetics, as well as any potential impact on mortality and morbidity outcomes.

Market-Wide Impact

It is clear that progress in our understanding of genetics poses challenges and opportunities at the same time, and recent product examples showcase how insurers are taking advantage of the opportunities. In Asia, a few notable examples include additional benefits for gene expression profiling for breast cancer, developed by RGA, as well as medical products with embedded pharmacogenomics testing benefits. At the start of the product development process, principles of analytical utility, clinical utility and validity, accuracy, counselling support, and overall benefit need to be considered to best serve both the insurer and applicant. Furthermore, as genetic testing becomes part of standard medical care, it could potentially trigger the alignment of existing products or benefits such as critical illness (CI) definitions or continuous cancer benefits.

As the market prepares for more exposure, progress, and engagement with genetic information, the time to analyze and test the potential business impact is now. However, this process requires a robust methodology. Genetic-science, behavioral, and market-specific insights will all need to be examined when developing assumptions.

While these are complex considerations now, we will know more over time. RGA closely follows genetics updates across various fields beyond insurance, engages in information-gathering initiatives such as surveys, and collaborate with experts, academics, and research institutes. Teams of experts study the potential impact of genetics on the insurance industry and engage in various industry-wide discussions to be able to provide expert advice and information to clients. Based on these principles, RGA regional experts have developed a flexible and scalable model that can be easily adapted for different products, markets, and insurers to assess the possible impact of genetic testing. Contact us to learn more.

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Meet the Authors & Experts

Jawalkar Dipali
Dipali Jawalkar
Executive Director, Underwriting, RGA Hong Kong
Dr. Heather Lund
Dr. Heather M. Lund
Regional Chief Medical Officer, RGA Asia
Summer Zhu
Dr. Summer Zhu
Regional Medical Director, Asia Pacific
John Cardus
John Cardus
Vice President, Head of Underwriting Manual Development
Neill Muller
Neill Muller
Vice President, Data Commercialization


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