Throughout this century we have become accustomed to regular improvement in mortality rates at most ages. For life office actuaries this trend could be regarded as a potential source of profit for assurance business, but as a possible source of loss for annuities. However, since the movements in mortality were gradual then mortality rates at any given time could be estimated with a fair degree of confidence.

In this relatively stable environment, there was little concern over the first report of a death caused by complete and unaccountable failure of the immune system in the United States of America in 1981. When the number of such deaths began to grow and to migrate to Europe than actuaries had to take notice. Here was a disease (called AIDS) which was causing deaths at an alarmingly increasing rate and which medical science seemed powerless to counter. Concern grew about the effect which a major increase in mortality rates caused by AIDS would have on the financial health of life offices.