Discovery Life paid out a total of R11bn to clients in 2022 in claims linked to uncertain, life-altering events and shared-value benefits, according to the group’s annual claims review.
The payouts comprised R9.1bn in individual life and group life claims and R1.9bn in PayBack and Cash Conversion payments. The lingering, residual effect of the Covid-19 pandemic was also evident in Discovery Life’s increased claims for living benefits such as severe illness, capital disability and income protection when compared with 2021.
“Despite the total value of claims reducing from R11.79bn [in 2021] to R9.1bn, as a result of fewer Covid-19 related death claims, severe illness payouts rose by 16%, disability by 38% and income protection by 6%,” said Gareth Friedlander, Discovery Life’s deputy CEO.
“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 pandemic to endemic state.”
Discovery Life’s data suggests that mortality risk from Covid-19 is trending significantly lower, though the longer-term impact of the virus is expected to persist. The insurer cited research from the Economist showing that global mortality rates remain elevated by about 5% compared with pre-pandemic levels. During 2022, Discovery Life paid out R626m for individual life claims related to Covid-19.
“The impact of the pandemic on clients has shifted,” said Friedlander. “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.”
Health screening
Friedlander said another side effect of the pandemic is the considerable decrease in health screening by clients with the insurer noticing distinct parallels between its observed health screening deficit and higher severe illness claims.
“Cancer has always been high on the list of reasons for severe illness claims,” said Dr Maritha Van Der Walt. “Now, after the reduction in screening during the pandemic, we’re seeing the impact of late-stage diagnoses. Early detection of most health conditions, especially severe illnesses like cancer, remains critical for reducing risk and improving outcomes.”
Discovery Life said while breast cancer has an overall survival rate of only 30%, that increased to 95% in cases where it was diagnosed early. Similarly, prostate cancer has a 31% overall survival rate that increases to 99% if diagnosed early.
“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,” said Van Der Walt.
Ironically, data from across the group also shows an increase in claims related to unnatural causes in the wake of Covid-19 as people returned to pre-pandemic levels of activity. Vitality data shows physical activity has risen by 67% since 2020, while Discovery Bank expenditure data shows increased travel.
“Our shared data with the Discovery Insure Vitality Drive, reveals that our clients driving has recovered to just shy of pre-pandemic levels — but slightly lower as people drive less to work to adapt to hybrid working,” said Friedlander. “Unfortunately, life claims due to unnatural conditions have also increased with the return of pre-pandemic behaviours.”
Discovery said its full spectrum of unnatural death claims comprised roughly 30% motor vehicle accidents, 30% other accidents, 24% suicide and 16% due to crime.
Mental health
Discovery also voiced concerns about mental health issues. Citing research by the SA Depression and Anxiety Group (SADAG) and University of the Witwatersrand, it’s estimated that 5.5-million more South Africans are dealing with symptoms of probable depression since before the pandemic in 2019. The World Health Organisation estimates there was a 25% increase in anxiety and depression disorders during the pandemic.
“A concerning factor is how this impacts life expectancy. Such conditions can reduce longevity by 7.9 years when compared to those individuals not battling such mental health challenges,” said Friedlander. “The mental health situation in the country is very concerning and helpful interventions are crucial.”
Discovery Life said that during the past 10 years it has paid out more than R3.2bn for mental and behavioural claims, including suicides. Suicide claims in 2022 were 13% higher than the pre-pandemic period between 2019 and 2021 and 24% above the 2016-2018 period.
“We’ve also noted that females are 1.8 times more likely to claim under their income protection benefits due to mental health than males,” said Friedlander. “Males, on the other hand, are 2.2 times more likely to die by suicide than females.”
Cumulatively, Discovery Life has paid out R47bn in claims to clients since inception in 2000. It has also paid out more than R10.4bn in PayBacks to clients. PayBack is the insurer’s cash incentive that enables clients to earn up to 100% of their premiums back through the duration of their policies by managing their health and wellness.
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