Majority of life insurance companies fear the availability of genetic testing to consumers will be more disadvantageous and complex, and will have a negative impact on their business, a new survey shows.
Strategic Insights' survey of retail, direct and group life insurers found numerous issues surround the possible future use of predictive genetic information.
Almost all (90%) life insurers believe consumers will face significant issues with privacy. About half of respondents said the proposed changes can result in selective underwriting.
In addition to privacy and data security issues, top concerns include expectations that genetic testing will be made mandatory and result in distrust across the industry.
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When asked how an insurer would approach applicants with a monogenetic disease together with a genetic test result, 40% of the retail segment said it would offer a cover for the specific disease - but with a special premium loading.
Ten percent would refuse cover, but offer advice and genetic counselling and review it in the future.
However, up to 90% of life insurers across all channels said they would accept genetic test results from applicants who already had genetic tests on hand.
This week, the Financial Services Council announced it will spearhead a new moratorium to stop using genetic test results as part of insurance applications on 1 July 2019. It is expected to be in place until 30 June 2024.
FSC chief executive Sally Loane said similar to the UK, Australians will have the option to disclose favourable genetic test results but not adverse ones, she said.
The aim is to free Australians from the fear of taking a genetic test as the result will no longer prevent anyone taking out life insurance, she added.
Before July 2019, life insurers will have time to change online and paper application questions, underwriting manuals, algorithms and systems, and complete required staff training.
"We fully believe that the moratorium will give Australians the reassurance they need and the flexibility to evolve as the science does," Loane said.