Cancer and lifestyle-related conditions have returned as the leading drivers of claims payouts according to life insurer Liberty’s latest statistics.
The Standard Bank-owned group paid out R6.98bn in retail claims in 2022 to about 31,808 individuals and their beneficiaries, amounting to R26.85m every working day. That is a 31% drop from the R10.12bn paid out in 2021 and was driven largely by a significant fall in claims related to Covid-19 that fell to R449m in 2022 from R3.47bn in 2021.
“The significant reduction in Covid-related claims signals that the worst of the pandemic is over, however secondary effects of the pandemic have emerged in the form of chronic illnesses,” said David Jewell, executive for retail solutions at Liberty. “The long-term effects of Covid-19 will take many years to work their way fully through claims experience.”
Cancer was the leading driver of payouts to male and female clients in 2022, accounting for 28.8% of claims, followed by cardiovascular disease and disorders (22.4%), respiratory issues (11.9%), strokes (6.5%) and renal disorders (5.9%). Breast cancer accounted for 49% of cancer-related claims for females and prostate cancer for 31.5% of all approved cancer claims for male clients.
Mental health
“Cancer and cardiovascular diseases remain significant and give us an indication of the challenges that continue to face society,” said Dr Dominique Stott, Liberty's chief medical officer. “This is a reality for all of us and the importance of being insured against these risks cannot be [overstated].”
Liberty said the pandemic’s mental health effect was also reflected in its claims data. Suicide accounted for about half of such claims and depression and anxiety for 16%.
“While we are seeing a considerable reduction in Covid-19 cases, the long-term effects of the pandemic will remain with us for a while and this inevitably includes mental health issues,” said Stott.
Retrenchment claims fell in 2022, accounting for 4% of all claims compared with 7.2% in 2021. More than half of such policies were taken out in Gauteng (52.1%) followed by other major economic hubs such as KwaZulu-Natal and the Western Cape. A high proportion of retrenchment claims were from clients in the 35-44 years age bracket.
“This reflects the effects of a subdued economy on this cohort,” said Tom Crotty, a risk proposition management specialist at Liberty. “The impact of the subdued economy combined with the further economic stress brought on by load-shedding, is affecting businesses across the country.”
Liberty’s data also mirrored findings by the Association for Savings and Investment SA (ASISA) showing that women are marginally less covered than men for death and disability.
In terms of gender, 68% of claims for death, disability and critical illness were from men, particularly those over 65 years of age, though that was likely to be a function of historic gender imbalances in which men tended to be breadwinners and financial decisionmakers in households. This was borne out in Liberty’s claims data, which showed a more balanced ratio of females to males in younger age groups as social change resulted in more women becoming breadwinners and the heads of single parent households.
“Changing societal norms signal a pressing need for women to prioritise life insurance to help protect themselves and their children,” said Kedibone Chuene, head of Liberty’s specialist risk proposition management team.
Large increase
In 2022 Liberty paid out R2.58bn in corporate claims, 25% less than in 2021, again thanks to the easing of the Covid-19 pandemic. More than 40% of claims were from clients over the age of 55.
“There was a large increase in critical illness claims,” said Stott. “This is mainly due to individuals now being able to go for screening following the strict lockdown conditions in 2021. This is to be expected because in 2021 hospitals were focused on Covid-19, and not many individuals were being diagnosed.”
Liberty said 94.8% of claims submitted in 2022 were paid compared with 93.6% in 2021. Claims not paid were a result of factors such as claims being submitted for diseases or conditions not covered in the critical illness policy, or for not meeting the benefits criteria.
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