PBS News Hour picked up the story written by Rebecca Robbins at StatNews about how we are working to change the life insurance industry.
While I can do without the macabre headline graphic (life, death & science is beautiful, not ghastly), the story does a great job on highlighting change that is occurring within the life insurance industry.
The life insurance business is all about betting on how long you’re likely to live. Now, one company is turning to the hot, but still unproven, field of epigenetics to try to make that bet more scientific.
Science is coming to life insurance, and as a panel of leading insurance executives recently gathered to discuss the implications of technology and life insurance industry concluded: “The Genie is Out of the Bottle.” The growth of advanced technologies over the last several years is remarkable. And the science of epigenetics, while relatively new, is leading scientists to discover a whole new field of study in how our gene expression changes due to environmental factors that occur at a molecular level.
In other words, epigenetics is the molecular science of how we can measure individual exposures to stress, over eating, cigarette smoking, exercising, and a host of other activities that manifest themselves in our gene expression. Measuring health and wellness due to lifestyle and environment go to the heart of life insurance underwriting. So being able to measure the levels of health and wellness at more precise levels during an underwriting process provides the ability to improve products. Moreover, while the science of epigenetics is relatively new, we know the level of prediction today will be eclipsed by our level of prediction in five, ten or twenty years from now.
So the genie is out of the bottle, it’s not going back in, and as a result we should stand ready to embrace technology within life insurance and expect it to bring improved product design, improved consumer experience, and reduced costs. After all, where in consumer products has technology not resulted in improved products delivered at reduced costs? Smart phones, laptops, iPads, investing tools, all types of payment processing, automobiles, Uber, long distance (oh yes, at one time we had to pay exorbitant amounts of money to speak with our family/friends who lived outside our area code), airline travel (remember when received a paper ticket in the mail? and then try to changed your flight) – the list is endless – and it’s not going to change – it’s only going to accelerate. Life insurance is no different, it’s a consumer product, a wealth management tool, that if you can afford provides an excellent tool to help manage personal finances and risk. The idea that we should not strive for improve the products with new features, that provide better service, at reduced pricing is repugnant. If we can build driverless cars, I bet we can underwrite life insurance better.
As for whether epigenetic science is predictive of all-cause
mortality: in-theory, or in-fact, read the science first, then comment. The science is predictive of whether someone does smoke or drink. Is the science predictive of whether someone sky-dives or alligator wrestles? Not yet. But there is science and databases that is can be predictive of an individual’s willingness to engage in risk-based behaviors (e.g., motor vehicle records, credit score) so science will lead us to machine based underwriting. That is the goal – and by achieving this goal, we can envision radical improvements to pricing, and features offered in life insurance products offered to consumers. So don’t be surprised if one day, in the not so distant future, this does in fact happen. I predict that. I do see that. Says me, the entrepreneur, faithfully attending the school of life, working to develop commercial applications of the use of predictive epigenetic information to disrupt traditional methods used in life insurance underwriting.