Privacy concerns about genetic information may increase insurance rates

October 30, 2007

Ontario, Canada - October 30, 2007 - A new study published in The Journal of Risk & Insurance explores the financial implications of banning insurance companies from accessing genetic information. Drawing on data that includes economic, demographic, and relevant family background information, the study simulates the market for 10-year life insurance plans that include breast cancer testing for women 35-39 years of age, examining the potential impact of keeping genetic test results away from insurers.

"The simulation suggest that, at least for some family background types, if a sufficiently large fraction of women were to become informed about whether they have one of the BRCA1/2 genes, the efficiency effects may be quite substantial," says Michael Hoy, co-author of the study. The possibility of insurance buyers being informed about a wide range of genetic test results that have a significant impact on mortality would further reinforce this effect. However, if only a fraction of testing information is available, such as through voluntary opt-in methods, the efficiency effects would be insubstantial due to the same adverse selection factors seen throughout the insurance industry.

This points to the possibility that as genetic information in society grows, there may come a point when genetic privacy may not be desirable. The study suggests instead that short- to medium-term moratoria on the use of genetic test results by insurance companies may be a more desirable policy framework than strict regulation through legislation that may be difficult to change in the future.
This study is published in The Journal of Risk & Insurance. Media wishing to receive a PDF of this article may contact

Michael Hoy is professor of economics at the Department of Economics, University of Guelph, in Guelph, Ontario, Canada. He can be reached for questions at

The Journal of Risk and Insurance is the flagship journal for the American Risk and Insurance Association. The JRI publishes rigorous, original research in risk management and insurance economics. For more information, please visit

Blackwell Publishing Ltd.

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