The Relevance of Genomics for Insurers
Genetic sequencing will be readily available and will radically impact health and life insurers. We’ve done a comprehensive survey of the market to assess the risks and opportunities created by genomics in product management, underwriting, and claims. The following article is an excerpt from our genomics study. You can download the full report via the link below.
The history of genetic science started around 150 years ago, when the German monk Gregor Mendel performed experiments with thousands of pea plants to investigate how distinct traits were inherited from one generation to the next. Roughly 100 years later, 1953, after genes had been discovered as the hereditary units with DNA as the underlying substrate, James Watson and Francis Crick proposed the now iconic double-helical structure of DNA. During the half of a century that followed, the genetic code was discovered, and it became possible not only to multiply and read out DNA, but eventually also to manipulate it and transfer it from one species to another.
This development culminated in the success of the Human Genome Project, which announced the complete sequence of the human genome in 2001 after over a decade of concerted research efforts by hundreds of scientists around the globe at the cost of several billion USD. Today, leveraging both this ground-breaking initial effort and new technology, the whole genome of an individual person can be sequenced in a few days at the cost of less than USD 1’000.
This massive reduction in both the price and effort necessary to sequence the genome of an individual person has led to an exponential increase in the number of sequences available for study. At the same time, genetic testing has moved from academic laboratories to the public. This is particularly due to the arrival of quick and affordable direct-to-consumer testing services. And owing to miniaturization, sequencing devices are now available which, instead of filling small rooms, can be carried in a pocket or attached to mobile computing devices.
The advancements in genomics over the last few years have been astonishing, both with respect to genome analysis as well as gene manipulation and therapy. These developments will have an impact not only on the medical field, but also on related industries like the health and life insurance sectors. Indeed, if we look at the number of scientific articles published on genomics (or genetics) and insurance, we see a clear upward trend during the last ten years (see figure 1).
Synpulse expert survey
Synpulse has conducted an online survey to assess how insurers perceive the impact of genomics on their industry, especially in terms of the risks and opportunities along different parts of the value chain. We surveyed some 60 domain experts, executives and senior executives from the insurance and reinsurance industries in the EMEA, Americas, and APAC regions.
Genomics as an opportunity for insurers
About three-quarters of the survey’s participants believe genomics has a high or very high potential in terms of opportunities. They see slightly higher opportunities for health insurance than for life insurance (see figure 2).
Genomics as a risk for insurers
More than half the participants consider genomics to pose a high or very high risk to both the life and health insurance industries. Life insurers are perceived to be at a somewhat greater risk (see figure 3).
The importance of genomics for insurers
Half of the participants said that the issue of genomics was high or very high on their employer’s agenda (see figure 4). The other half of those surveyed said their employer has not yet recognized the importance of the topic and, hence, taken no action. This is surprising considering that some of those surveyed consider genomics highly relevant. Given that a majority of all participants believe genomics will significantly impact them in coming years, we recommend that all life and health insurers look into the subject.