Actuarial activity in the insurance sector: risks of information asymmetry in access to genetic information of insurance applicants

Анотація

Introduction. The article examines the risks and features of information asymmetry in access to genetic information of insurance applicants during actuarial activities in the field of life and health insurance. Problem Statement. The current conditions under which both insurance risk assessment and actuarial activity in general in the insurance sector both in Ukraine and abroad can often be characterized by risks of imbalance and information asymmetry during the conclusion of an insurance contract between the insurer and the insured. As a result, such a situation can lead to adverse selection, which occurs when insured persons know the results of their genetic tests or other genetic information and do not disclose it to the insurance company before concluding an insurance contract. The purpose is to evaluate the risks and features of information asymmetry in access to genetic information of insurance applicants during actuarial activities in the insurance sector. Methods. The article uses a complex of both general scientific and specific methods, including the following scientific research approaches: analysis, synthesis, description, grouping, theoretical generalization and comparison. As sources of materials, mainly foreign and domestic scientific publications on this topic were used, as well as scientific analytical studies related to the issue of information asymmetry in access to genetic information of insurance applicants during actuarial activities in the insurance sector. Results. It is substantiated that in most cases insurance companies seek to avoid both information asymmetry during actuarial activities in the insurance sector (assessment of insurance risks and/or determination of any other terms of the insurance contract) and adverse selection. After all, these two factors can lead to negative financial consequences for the insurance company, because the assessment of insurance risks was not completely objective and did not take into account all the information that was available to the insured. At the same time, the degree of impact of information asymmetry and adverse selection on the insurance company will also partly depend on the type of insurance service: for the spheres of life insurance and health insurance, the impact of information asymmetry in access to genetic information of insurance applicants on the financial and economic condition of the insurer will be correspondingly different. Conclusions. The study substantiates that information asymmetry poses significant challenges to the stability and efficiency of the insurance market, and can also be a cause of adverse selection (in the context of genetic information), which occurs when an insurance applicant is aware of his increased genetic risk and does not report this data to the insurer in order to buy an insurance policy at a price lower than that which would correspond to the true insurance risk that this insurance applicant has.

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