IN 1837, the family of early Melbourne settler Joseph Tice Gellibrand made the first life insurance claim in Australia after their relative headed out to Victoria’s western district and was never heard of again.
They got their £2000, but the supposed circumstances of his death caused something of a panic in London insurance circles, according to legal historian Dr Stephen Smith.
Unsubstantiated rumours that Gellibrand had been killed by local Aboriginal people (and, in some of the more lurid versions, eaten) apparently prompted one insurance company to add a clause to policies barring pay outs for deaths resulting from criminal executions, suicide or “a collision with an Aboriginal native of New Holland”.
(You could argue the greater risk in such encounters was not borne by the white settler, but I don’t suppose the “Aboriginal natives” were lining up to take out life insurance policies at the time.)
Insurance companies today are no less concerned to protect themselves from identifiable risks, though the front line of such endeavours is now more likely to be found in the human genome than on the colonial frontier.
The growing sophistication and affordability of genetic testing poses threats to the whole concept of life insurance, as a group of physicians from Columbia University wrote in JAMA last week.
Most of us probably have an instinctive revulsion against the idea that insurers might be able to access individuals’ genetic information and make decisions about premiums, or whether to offer insurance at all, on that basis.
The ability to test for genetic risk does, though, raise the possibility that those found to be at higher risk would be more likely to seek life insurance than those who were told they were in the clear — potentially undermining the business model for insurance which relies on the sharing of risk across the community.
In Australia, the industry standard states that insurers will never require an applicant for insurance to undergo a genetic test but may require the results of all previous tests to be disclosed.
That might seem to solve the problem, except that the disclosure requirement could deter people from having tests out of fear this could prevent them from getting life insurance in the future.
A small Australian study indicated that might be the case in people at familial risk of colorectal cancer.
The decision not to test might, paradoxically, end up increasing risk — for insurers as well as individuals.
“If results of genetic tests ultimately aid diagnosis, prevention and treatment, testing could actually lower the risk for many insurance applicants”, the JAMA authors write.
“Indeed, every person has genetic predispositions to disease, and many can be modified by lifestyle changes and medical interventions.”
So what to do?
It’s crucial that we don’t leave this to the industry to sort out, the JAMA authors write, calling on doctors, researchers and policymakers to consider “these rapidly evolving issues”.
Their preferred option in the interim is the UK model, where modest amounts of life insurance are available to everyone without a requirement for genetic disclosure. Only those seeking a higher level of cover can be asked for genetic information.
Whatever the solution, we are fortunate that the complex issues around genetic testing currently only arise in relation to life insurance in this country.
When it comes to the far more important area of health insurance, the principle of “community rating” means everybody pays the same premium regardless of family history or genetic risk.
Let’s keep it that way.
Jane McCredie is a Sydney-based science and medicine writer.