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The Actuary The magazine of the Institute & Faculty of Actuaries

Life: Living with HIV

Since the HIV virus emerged in the early 1980s, it is considered to have been responsible for over 25 million deaths worldwide. In 2007 it was estimated that an equal number of males and females (35 million people) were living with HIV. These numbers hide the suffering of families and whole communities, with as many as 12 million AIDS orphans in sub- Saharan Africa alone.

In the ‘80s governments and actuaries made predictions as to the probable increase in general and insured population mortality rates. The data was sparse, information imperfect and the clinical and epidemiological features of the disease not fully understood. In addition, the modelling required transmission rates that implicitly contained hard-to-estimate behavioural assumptions — never an easy task. At that time, those unfortunate enough to be infected developed AIDS within five to 10 years and died within the year. Often the first diagnosis of HIV was as the AIDS-defining illnesses emerged. Predictably, the insurance industry strengthened their underwriting and the terms for life cover hardened substantially, even for those deemed a minor extra risk.

The high forecast of extra yearly deaths in the population never materialised. Over the last decade, deaths from AIDS in the UK have been running at approximately 500 per year. This outcome may be due to many factors, not least to behavioural changes through shocking first estimates of deaths and hardhitting media campaigns.

Today, with a prevalence of approximately 0.2% [0.1, 0.5” of the adult population aged 15 to 49 infected, the UK has escaped fairly lightly compared to other parts of the globe. For example, prevalence rates as stated by the World Health Organisation (WHO) are at least 15% in sub-Saharan Africa. Figure 1 (below) shows the prevalence across the world for ages 15 to 49.

Despite the medical community’s best efforts, the virus has proved to be a formidable foe with a vaccine or cure remaining elusive. However, medical science has, in recent years, been able to improve life expectancy with a treatment regime of highly active anti-retroviral therapy (HAART). This generation of drugs suppresses the HIV virus by inhibiting its replication and damage to the immune system. It is not a cure — some patients may suffer serious side effects while others will not respond to treatment. For those individuals who respond well to HAART, expected survival has improved dramatically.

Cohort trials are in place for groups of patients following the HAART regime. Survival data is collected and published in journals and online alongside a prognostic model. As actuaries, we constantly look for data to assist our role, and this data is an excellent source to consider when deriving life assurance terms.

Some experts now believe that a favourable response to HAART treatment could herald a near-normal lifespan. This is not yet supported by qualitative data as the long-term effects of treatment are still unknown. However, for individuals who are fortunate enough to access HAART treatment and show good response to therapy, life assurance terms are now available in several countries around the world. In the UK, the initial step has been to offer term assurance up to 10 years as supported by the data, on a relatively modest extra per mille loading.

The South African market has evolved further in response to the demand of over five-million-plus HIV lives. Both term assurance and whole-of-life products have been designed, albeit with clauses to protect against non-adherence to treatment.

Being able to price terms or develop products for individuals with serious health conditions is an area where actuaries must work together with underwriters and chief medical officers. When we have new survival evidence about a condition such as HIV we should look to revise terms accordingly.

HIV remains a serious global disease which is still spreading throughout the world. The recent success of HAART is an example of how medical advancements can lead to a huge improvement in life expectancy for individuals who previously had a very poor prognosis.

Further Reading:

James Shattock is manager of actuarial pricing for Hannover Life Re UK