TY - JOUR
T1 - Multifactorial genetic disorders and adverse selection
T2 - Epidemiology meets economics
AU - Macdonald, Angus
AU - Tapadar, Pradip
PY - 2010/3
Y1 - 2010/3
N2 - The focus of genetics is shifting its contribution to common, complex disorders. New genetic risk factors will be discovered, which if undisclosed may allow adverse selection. However, this should happen only if low-risk individuals would reduce their expected utility by insuring at the average price. We explore this boundary, focusing on critical illness insurance and heart attack risk. Adverse selection is, in many cases, impossible. Otherwise, it appears only for lower risk aversion and smaller insured losses, or if the genetic risk is implausibly high. We find no strong evidence that adverse selection from this source is a threat. © The Journal of Risk and Insurance, 2010.
AB - The focus of genetics is shifting its contribution to common, complex disorders. New genetic risk factors will be discovered, which if undisclosed may allow adverse selection. However, this should happen only if low-risk individuals would reduce their expected utility by insuring at the average price. We explore this boundary, focusing on critical illness insurance and heart attack risk. Adverse selection is, in many cases, impossible. Otherwise, it appears only for lower risk aversion and smaller insured losses, or if the genetic risk is implausibly high. We find no strong evidence that adverse selection from this source is a threat. © The Journal of Risk and Insurance, 2010.
U2 - 10.1111/j.1539-6975.2009.01342.x
DO - 10.1111/j.1539-6975.2009.01342.x
M3 - Article
SN - 0022-4367
VL - 77
SP - 155
EP - 182
JO - Journal of Risk and Insurance
JF - Journal of Risk and Insurance
IS - 1
ER -