Medical and technological advances and insurers' growing reliance on data will spur demand for highly-skilled 'predictive underwriters' in the future, according to CommInsure business services general manager Michael Browne.
"Medical genetics has uncovered various gene therapies which could promise a cure for several serious medical conditions in the foreseeable future," Browne said.
InvestorDaily asked numerous other insurers about their approach to this trend, but all except Allianz declined to comment.
An Allianz spokesperson said that "while it is an issue Allianz is aware of and monitoring, it is less relevant to our direct model than to life insurers that offer more comprehensively underwritten products".
Browne asked what it would mean for trauma insurance when a trauma event was no longer considered traumatic.
"Will previously uninsurable medical conditions become acceptable underwriting risks in the future?" he said.
The costs of genetic testing were falling, while coverage continued to increase. Currently, an individual could have their entire genetic code sequenced for around $4000, an amount that could fall to merely hundreds of dollars in the next five years.
"Several home testing kits are already available to help individuals self-diagnose significant diseases, without the need to directly involve or inform any medical practitioner, creating several challenges for life underwriters," Browne said.
As home genetic testing encompassed more diseases, underwriters would have to revise corresponding medical guidelines and look to policy changes to minimise the anti-selection risk.
Human cloning, stem cell therapy, genetically-engineered 'designer' babies and other similar genetic advances would also challenge underwriters.
Nanotechnology and nano-medicine were helping early prevention, diagnosis and treatment of many cancers, which currently constituted a significant burden of disease among the Australian population.
Over the longer-term, nano-medicine would affect several insurance products, Browne said.
Trauma insurance products would need rethinking, especially the core trauma benefits covering cancers and heart disease, which were the current focus of nano-medical research.
Better diagnostic tools could improve trauma claims experience, as a result of advances in the screening and diagnosis of several cancers at the early (pre-cancerous) stage, before they progress to a malignant tumour.
On the other hand, enhanced tools could also have a cumulative effect of increasing the overall number of diagnosed cancers, possibly adversely impacting trauma claims experience.
Through data analytics and predictive modelling, insurers could tap-into 'big data' to develop and offer innovative and compelling new products.
Already, general insurers had evolved their pricing models to better segment the more attractive risks through discounts and loadings to see how data could be further used in life insurance.
