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South Africa the leading light in insurance medicine

12 July 2007 LOA

South Africa is one of only two countries worldwide where HIV positive people have access to life insurance products. While three of South Africa's biggest life insurance companies were the first to introduce life policies for HIV/Aids positive people in 2001, the Netherlands followed suit only last year.

But despite South Africas expertise when it comes to underwriting policies for HIV positive people, local life insurers are having a hard time convincing international experts that HIV is now an insurable disease provided there is access to treatment.

Dr Pieter Coetzer, convenor of the Medical and Underwriting Standing Committee of the Life Offices Association (LOA), recently attended the 22nd International Congress of Life Assurance Medicine (ICLAM) in Berlin, Germany, with the aim of sharing South Africas experience when it comes to underwriting HIV/Aids.

Coetzer has attended the past six ICLAM conferences over 18 years. At the last conference, Coetzer addressed delegates on the insurability of HIV positive people in South Africa. He informed participants about ART (anti-retroviral treatment) programmes in South Africa and the differences between the old and new generation life products available to HIV positive people.

HIV/Aids

Coetzer says South Africas long-term insurance industry remains one of the most sophisticated in the world. "We attend this underwriting conference every three years, not to learn from international practices, but to confirm our own practices and to share lessons learnt with experts from other countries. The LOA also sends a delegate to the International Aids conference every two years to stay abreast of the latest developments in the field of HIV/Aids."

"The world is interested in what we are doing, but experts remain skeptical about the wisdom of underwriting people who are HIV positive. With the exception of the Netherlands, the rest of the world prefers taking the wait and see approach."

Coetzer says not only was South Africa the first country to introduce critical illness products in the 1970s, but in 2001 South African life insurers also pioneered risk cover for functional impairment as well as life cover for HIV positive people.

In addition, the LOAs HIV Testing Protocol, which regulates HIV testing for insurance purposes, is one of the best in the world, says Coetzer. The protocol sets out quality standards for HIV testing and also addresses aspects such as personal pre- and post-test counselling.

"Our protocol is primarily aimed at reducing the number of false-positive results. This means that when there is any doubt regarding an HIV test result, the client is always given the benefit of the doubt and considered HIV negative for the purposes of the life policy."

He says because South Africa has unique challenges when it comes to HIV/AIDS, existing products are still relatively expensive. But, South Africa's current offering represents the initial step towards affordable and fair risk cover for people living with HIV/Aids.

According to Coetzer, at least one of South Africa's big life insurers is about to launch a more affordable life insurance product for HIV positive people.

At the first ICLAM conference in 1906, the main topics of discussion were infectious diseases like tuberculosis and syphilis, vaccinations, and obesity. Now, more than 100 years later obesity remains of concern, but the only infectious diseases still to feature on the ICLAM programme were HIV/Aids and influenza.

Other topics covered at the 2007 ICLAM conference included the ethics of genetic testing for insurance purposes, mental disorders as the leading cause of disability, and benefits of tele-underwriting.

Genetic Testing

Genetic testing involves the analysis of genes and chromosomes for the purposes of determining inherited predisposition to a particular disease.

Coetzer points out that the LOA in its Code on Genetic Testing states that it is currently considered inappropriate to request applicants to undergo genetic testing. Where consumers have, however, undergone genetic testing on their own accord before applying for life cover, they are required to disclose the outcome.

While the Code may change going forward, Coetzer says in this area the South African long-term insurance industry prefers to follow rather than lead. This is because genetic testing can result in psychological trauma for the person being tested, especially when the results reveal high risks of developing a disease that has no proven cure.

Mental Disorders

Coetzer says mental disorders like depression and post traumatic stress disorders were under discussion at the ICLAM conference, because they have overtaken back pain as the worlds number one reason for disability claims.

He says mental diseases present a challenge for life insurers because they are difficult to measure due to the subjective nature of the diseases.

"A high claim rate for mental disease is usually closely correlated to the downward cycle of a country's economy. Strong economic fundamentals on the other hand usually result in better job security and therefore lower number of claims on psychiatric grounds."

Tele-underwriting

Worldwide insurers are moving towards tele-underwriting, whereby a life company assesses an applicants risk via telephone rather than relying on the financial adviser to complete the medical questionnaire.

Coetzer says the biggest advantage of tele-underwriting is improved confidentiality of medical information. This is because the client now does not need to inform the intermediary about any medical history, but will share this directly with the underwriter during a tele-interview. Also, consumers are generally more honest when answering questions over the telephone than when they have to disclose sensitive personal details and medical information to their financial adviser. In addition tele-underwriting consultants are trained to ask all the right questions.

"This greatly improves the quality of the medical information provided by applicants and reduces the need for medical examinations. The majority of medicals are required because the adviser and the client have not provided sufficient details."

Coetzer says increasingly local life insurers are phasing in tele-underwriting.

ICLAM 2010

South Africa has won the hosting rights for ICLAM 2010. Coetzer also chairs the organizing committee that is bringing the 23rd conference to Cape Town three years from now.

This will be the first time that this prestigious event with more than 100 years of history will be held on the African continent.

"ICLAM 2010 will present international experts with a unique opportunity to learn first-hand how South Africa meets the insurance needs of a developing country of diverse cultures," says Coetzer.

The triennial ICLAM conferences are aimed at medical advisors in the field of insurance medicine and occupational health, underwriters, claims assessors, occupational therapists, actuaries and business managers in risk assessment.

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