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Top five life insurers pay out more than R43-billion in 2022

Top five life insurers pay out more than R43-billion in 2022

Five of the biggest life insurers paid out a total of R43.2-billion, but that’s less than the year before as the effect of the pandemic recedes - even although it hasn’t disappeared completely.

Life insurers have now all released summaries of their 2022 claims stats, with a cumulative payout of R43.2-billion across five of the biggest companies: Old Mutual (R14.7-billion), Discovery Life (R9-billion), Liberty (R6.98-billion), Sanlam (R6.38-billion) and Momentum Retail Life Insurance (R6.18-billion).

The diminishing impact of the Covid-19 pandemic can be seen across the board, with Momentum reporting that while Covid accounted for 42% of total death claims in 2021, this figure dropped to 12% last year. This tied in with Old Mutual, which was responsible for the biggest claims payouts in 2022 at R14.7-billion, but also reported a 30.7% decrease in claims paid out compared to 2021.

“The decline in overall payouts of around R6.5-billion was expected, as 2021 was an exceptional year for claims due to the surge caused by Covid-19, and we are now starting to see a return to normal,” says John Kotze, head of retail protection product marketing at Old Mutual. Old Mutual reported an average payout of R29.2-million for every working day in 2022, including death, disability, illness and retrenchment claims.

Discovery Life’s deputy chief executive, Gareth Friedlander, says the reduction in Covid-19-related death claims was offset by increasing morbidity trends, reflecting the changing nature of risk related to Covid-19 as it shifts from a pandemic to endemic state. Discovery Life’s data supports the evidence that the longer-term impact of the illness and the pandemic is expected to persist, with research suggesting that global mortality remains elevated by 5% when compared to pre-pandemic levels. 

During 2022, Discovery Life paid out a total of R626-million for Covid-19-related individual life claims. “The impact of the pandemic on clients has shifted,” Friedlander says. “We are now processing more claims for living benefits than for life cover. Long-Covid isn’t entirely understood, but the risk is expected to continue for the foreseeable future and presents another reason for South Africans to ensure that they have sufficient long-term risk cover in place.” 

Sanlam reported that Covid-19 still accounted for most sickness income claims (41%) in 2022. 

Petrie Marx, product actuary at Sanlam Risk and Savings, says while Covid-19 remained the leading reason for these claims, the payout of R31-million for people being booked off work was 46% lower than in 2021.

Confirmed Covid-19 claims accounted for just R133.7-million of Sanlam’s total 2022 payouts. 

“Our results are consistent with the global trend of Covid-19 cases becoming less frequent and severe as vaccination efforts and past infection result in some ‘herd immunity’ worldwide. Our data reveals interesting pandemic patterns; between March 2020 and March 2022, most Covid-19 death claims came from men, but sickness- and disability income claims for clients booked off from work for Covid-19, were more or less the same for men and women,” Marx says.

Impact of reduced health screenings

“Another side effect of the pandemic is the considerable decrease in health screening,” says Friedlander. Distinct parallels can be drawn between Discovery’s observed health screening deficit and a higher-severity diagnosis in severe illness claims. 

“Cancer has always been high on the list of reasons for severe illness claims. Now, after the reduction in screening during the pandemic, we’re seeing the impact of late-stage diagnoses,” says Discovery Life’s chief medical officer, Dr Maritha van der Walt.

She says this serves as a stark reminder of the importance of annual, routine check-ups, for early detection of health conditions so that patients can reduce their risk and improve health outcomes.

“As much as 47% of our severe illness cancer claims are for those where health check screenings are already an established practice at population level. Regular screenings are crucial for improving breast, prostate, cervical and colon cancer survival rates, where early detection is possible and could vastly improve the health outcomes of clients.

“For instance, early-stage-diagnosed breast cancer has a 95% survival rate and, similarly, early-stage prostate cancer has a 99% survival rate. At late stages, both conditions have a 30% and 31% survival rate, respectively,” Van Der Walt says. DM

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