Genetics, Lie Detectors And Drugs

The future of insurance is here: genetic testing, lie detectors for car owners, and better drugs for private patients.

Today I'm making a rare but admittedly enjoyable foray into science and psychology in insurance. I'm going to explain the latest research, techniques and technologies. Some of them are being used or considered by the insurance industry to improve its assessment of what it calls `the risk' (and what everyone else calls `you and me', the insured). Others are being used to improve the industry's service and to detect fraud.

Genetic testing

Currently, insurers will not ask you to take predictive genetic tests in order to get an insurance quote, but they might ask you for previous results if you have already taken such tests. If your result showed faulty genes, you can, most of the time, find insurers that don't ask that question.

However, genetic test results have infiltrated most insurers' assessments since the start of this Millennium. If you have had a predictive genetic test and apply for life insurance of more than £500,000, you must reveal if your test has found that you have the faulty gene that causes Huntington's Disease.

Most insurers have voluntarily decided to take into account just the genetic tests that are approved by an independent Government body: the Genetics and Insurance Committee (GAIC). So far, Huntington's Disease is the only application that has been successful, and that was eight years ago.

Even so, further diseases are likely to be added as time goes by. At present, most insurers will just insist you reveal genetic tests that have been approved by the GAIC when you apply for life insurance over £500,000, critical illness cover of £300,000 or more, or income protection insurance of £30,000pa or more. You can't get around this by buying £300,000 of life cover from one insurer and £200,000-worth from another; both still need to be informed of the faulty gene to ensure the insurance is valid.

Besides your own genetic tests, insurers routinely ask about your family's medical history, including genetic disorders. However, if you've had a predictive genetic-test result that shows you haven't inherited a faulty gene, you can voluntarily disclose this information. The insurer might take it into account.

Investigating motor fraud

Insurers are getting better at spotting insurance fraud. Last year they uncovered 67,000 fraudulent claims under household, travel and liability insurances. Insurers are getting particularly good at detecting motor insurance fraud, as the number caught has increased 70% in three years to 24,000 last year.

Insurers say they are using more and more sophisticated measures. Claims are routinely checked for suspicious elements and then the insured is questioned further.

At least one insurer now goes further by using psychological tests. Another technique is to send an expert round to visit the insured, look `em in the eye, and hear the sequence of events face-to-face. A third technique is to use software that can often recognise when people are lying from the tones of their voices, which can be used in call centres. Just don't get chatty and talk about your dinner plans.

New healthcare drugs

There are simply too many new and better drugs being developed every week to list them all, but many of them, in particular cancer drugs such as Avastin, are often found to be too expensive by the National Institute for Clinical Excellence (NICE), which approves drugs for the NHS.

People with private medical insurance have access to these drugs. Sometimes they double your life expectancy or chances of surviving compared with the NHS' `budget' option. However, the Government has ordered the NHS to stop treating people if they pay privately for better drugs. Some NHS doctors ignore the ban, but many NHS Trusts appear to be enforcing it rigorously. This means that we must decide if we'll pay for better drugs and lose our free, ongoing NHS treatment.

The argument for this seemingly inhumane ruling is that, once it is allowed, it will spread into other treatments and cause a two-tier NHS. I'll leave that up to you to research further and decide whether it's fair. In the meantime, if this situation happens to you, please do fight the Trust's decision not to treat you anymore. Consider writing to the newspapers. Several people have made their cases public with the result being that the Trust has reversed its decision.

All figures provided by the Association of British Insurers.