How gene blueprint will affect insurers

As scientists this week announced that we now have the draft blueprint for human life, insurance buyers and companies are asking how this breakthrough, perhaps the greatest in scientific history, will affect our finances.

Those behind breaking the genetic code reckon their research could eventually extend our lives by 20 years - not far-fetched, as the last century saw average UK life expectancy increase by two decades.

The commonsense response is that, if we live longer, life insurance should be cheaper as the chances of a claim are cut.

But pensions will become more expensive if we all start living to 100 but still retire at 65. Pension funds depend on numbers of members dying quickly after retirement to balance out the long-lived. If we all live longer, we will need bigger funds and hence bigger contributions.

And the effect on health and critical illness insurance premiums is a double-edged sword. Health insurance should be cheaper, but the cost of new treatments may push premiums up. The longer we live the more likely we are to succumb to illnesses which need, potentially, expensive treatment.

Critical illness cover is quite a different affair. If we get the medical breakthroughs promised, the need for critical illness insurance could be reduced.

At the moment, you pay your premiums so that if sickness strikes you get a lump sum payment to cover care and loss of earnings. But if some illnesses, such as cancer, become easier and quicker to treat, we may elect to have smaller lump sums and premiums should go down accordingly.

For this to happen the human genome project must lead to medical breakthroughs. But as Bupa's Dr Virginia Warren explains, the issue is not that simple: "Many of the genes which the project has discovered will not be involved in disease or, if they are, will be involved with a handful or other genes and lifestyle and environmental factors. We will have to establish how these factors interact before we can establish the likelihood of someone getting a disease and this will take years, if not decades."

Norwich Union agrees that the project's findings will not be immediate. "This will not happen overnight. An 80-year-old is not suddenly going to live until 100. People have gradually been leading longer and healthier lives and insurance companies have been continuing to accommodate this."

Dr Adrian Bull at PPP Healthcare believes financial products will evolve rather than change overnight. "Genetic information will provide risk management so we can gauge premiums more precisely," he says.

But in the meantime, under the Association of British Insurers' (ABI) code of practice on the use of genetic test results, insurers can only ask for the results of genetic tests you have already undertaken. They are not allowed to ask you to take a genetic test. Last year the government set up the Genetics and Insur ance Committee (GAIC), to assess applications for the use of results of specified genetic tests for specified insurance purposes.

This was partly in response to consumer fears that insurers will eventually make the leap from requesting disclosure of existing genetic test results to insisting that applicants undergo genetic tests as a condition of being offered insurance.

The concern is that, as tests are developed to predict the risk of individuals developing a range of diseases in later life, insurers will make such tests compulsory in order to cherry-pick the least risky applicants. Those with genetic predispositions to chronic conditions would, at best, face considerably higher premiums for life and health-related insurance and, at worst, be uninsurable.

But the ABI insists: "We are not out to get people to go and take genetic tests. While the majority of insurers now require the disclosure of genetic tests already undertaken, to ask people to take tests would be a massive step and one we have absolutely no interest in taking."

Disclosure of health facts will still be prompted by standard medical and family history questions on insurance application forms and premiums loaded accordingly. But will there not be more discrimination if, as is predicted, tests are developed which can indicate whether people have a raised risk of common conditions such as heart attacks and strokes later in life?

John Gillot of the Genetic Interest Group, which supports those affected by genetic disorders, thinks not. "As long as insurers don't start asking people to be tested, which they say they will not, risk-factor genetics shouldn't be that significant for life insurance."

Crack the code

For copies of the ABI's Code of Practice or information sheet on Genetic Tests and Insurance, contact 020-721-67493 or www.abi.org.uk.

Other useful contacts include the Genetic Interest Group (GIG) 020-7704-3141 (www.gig.org.uk) and the UK Forum for Genetics and Insurance (UKFGI) 020-7632-2136, (www.ukfgi.org.uk).