Since late 1860s, when the Swiss chemist Friedrich Miescher identified DNA in the human white blood cells, mankind has been making rapid progress in the field of understanding human genome. It was soon discovered that strands of DNA are the micro building blocks of our genes. In plain and simple terms, genome is the complete instruction set of how any individual functions. It controls attributes ranging from height, bone structure to even the color of eyes and hair. Certain diseases that are considered hereditary like anemia or, in some cases, Parkinson’s are also caused by genes that are received from one’s parents. Recent advances in the field of human genome has given scientists a way to selectively modify human genome.

What is Gene Editing?

Gene editing is the process of targeting a section of genome and adding, deleting or modifying genetic material at that location. Scientists have developed several approaches to editing the genome but one of the recently discovered approach, CRISPR-Cas9, has gained widespread popularity for its relative simplicity and power. Using an eccentricity found in the immune system of bacteria, scientists have demonstrated successfully that they can edit genes in plant, mice and even humans. We are on the verge of being able to conveniently edit undesirable characteristics and potentially add desirable ones in living beings with unprecedented precision and accuracy.

What does Gene Editing mean for humans?

Though most countries have a moratorium on human trials, especially when it comes to reproductive cells, somatic cells, which make up most of our body and that do not pass genetic material to future generations, are being modified (currently under clinical trial) to provide relief to patients ailing from diseases like cancer, diabetes and AIDS. This type of modification is popularly called Gene Therapy as against the modification of reproduction genes, which is referred to as Gene Editing. If the clinical trials are successful, gene editing technology can open a new door for people who have suffered from genetic diseases for years. The coming decade will bring with it a new era for mankind, one that has the potential of entirely changing the way we live with congenital deficiencies. Extension of gene editing to reproductive cells will, in effect, give God-like powers to scientists. The idea of “designer babies”, though currently far-fetched, is being fiercely debated in the scientific communities. A scientist in China has already claimed to be involved in creating babies with edited genes and has since gone missing, presumably being secretly held by the government. It is now well beyond doubt that within the next 5 years CRISPR-Cas9 technology would have become mature enough to be able to successfully edit the reproductive genes in humans.

How would it impact the Insurance Industry?

Insurance industry’s dependence on centuries old statistical models to assess risk renders it incapable of absorbing the changes arising from these new technologies. Age, gender, smoker status and marital status are still being used as the primary indicator of an individual’s risk profile. There is an urgent need to design products and processes around the new technologies that have the promise to fundamentally alter human life as we know it. Some aspects of insurance that will see the largest impact of gene editing are

Rise of New Insurance Products

Existing insurance products do not cover the risks involved in getting a gene therapy/edit. However, the growing popularity of the technology and the promises it holds for its recipients is bound to see a large enthusiasm in existing and future insurance customers. Instead of simply excluding such procedures from insurance coverage, Carriers have a window of opportunity to actively collaborate with the academic community and design new products that can be offered that cover the risk of such procedures.

Advanced Risk Assessment

Furthermore, no statistical models currently exist to factor in procedures relating to gene edits in the risk assessment of an individual. Health and Life Insurance carriers will have to design new parameters that take into account the effects that an individual can expect after successfully undergoing a therapy/ edit. The existing risk models will fall severely short of providing a holistic report of mortality and genetic conditions in an individual’s future. Assuming that such human procedures are at least 5 years away from us right now, this might be the sweet time to get involved with leading research institutes and collect data that will give us reliable ways to model the risks posed by such procedures in the life of customers.

Health Insurance Products made Obsolete

A number of popular heath insurance products today will inevitably become obsolete as these genetic technologies become mature and more mainstream. Coverages like Critical Illness Protection and some Long Term Disability might become completely irrelevant or at the least drop in popularity due to these genetic technologies. Carriers will have to plan and prepare for the drop in revenue triggered by such products.

New Service Providers

To administer these complex and intricate procedures, customers will have to rely on service providers like specialty clinics, hospitals and nursing centres. The existing network of service providers might not be capable to perform gene modifications without significant investments in technology and personnel. Carriers will have to build relationships with the new service providers in addition to the existing providers and define processes to administer the approved procedures.

The evolving regulatory and technology landscape will ultimately decide the timelines of when the insurance industry will be hit by the gene editing technology but the size and scale of its potential impacts can be estimated right now. Arming themselves with the right talent that understand these hacks and closely working with the research institutes to obtain data for future risk models is the safest bet that carrier can do today.