According to the magazine “Money Marketing” of 31 December 2014 AIDS treatment is increasing life expectancy, and therefore the funeral policy market can expect to see the development of new products which could boost South Africa’s gross household savings by as much as 15%.
Life expectancy has risen from a low of 54 years in 2003 to 61 years in 2012. The number of patients receiving ART (antiretroviral treatment) has increased from 50 000 in 2004 to more than 2,3 million in 2013 in South Africa. Researchers from Stellenbosch University and Deloitte believe that there is an opportunity to design products that could encourage policyholders to maintain their payments. Cash-backs on funeral policies could offer opportunities for reinvestment, while surrender values on funeral policies could directly boost the savings of policyholders.
“All things being equal, the new business profitability on our model portfolio of funeral policies could be boosted by as much as 60% under our more aggressive mortality scenarios,” stated Marius Strydom, independent researcher.
At the end of 2013 35 million people were living with HIV globally. An estimated 39 million people have died from AIDS-related causes world-wide. The goals set for the national strategic plan for HIV and AIDS include:
- reducing new HIV infections by at least 50%
- initiating at least 80& of eligible patients on antiretroviral treatment, with 70% alive and on treatment five years after initiation.