Momentum and Liberty recently released their life, disability and critical illness statistics for 2021, and, not surprisingly, Covid-19 topped the list of causes for death claims, resulting in record payouts.
In any ordinary year, cardiovascular disease and cancer are the top causes of death for life insurance companies. Last year, at Momentum, 42% of death claims were Covid-related. Cardiovascular disease was the cause of death in 20% of claims and cancer was responsible for 17% of claims. At Liberty, 36.8% of death claims were Covid-related, while cancer and cardiovascular disease were 16.4% and 16.3% respectively.
The impact of Covid-19 can also be seen in the record payouts these companies made for death claims last year compared with 2020. In 2020 we had the first wave of the pandemic, but it was last year, with the second (Beta) wave peaking at the beginning of the year and the third (Delta) wave in the middle of it, that Covid-19 took its greatest toll.
In 2021, Liberty paid out R10.12 billion in life, disability and critical illness claims under its Lifestyle Protector Policy, almost 60% higher than the R6.34bn it paid out in 2020.
Momentum Retail paid out R8.97bn in claims in 2021, 66% higher than the R5.4bn it paid out in 2020.
I can’t help thinking that if the authorities had got their act together regarding vaccines earlier in the year, perhaps the vicious Delta wave would have been less impactful, and thousands of families would have been spared the premature loss of their loved ones.
Momentum breaks down further what it paid out in death claims during the four waves of the pandemic between May 2020 and December last year:
• Wave 1: R393 million
• Wave 2 (Beta): R1.09 billion
• Wave 3 (Delta): R2.56 billion
• Wave 4 (Omicron): R49 million
The Momentum statistics reveal that the Delta wave, besides being the most devastating, affected younger people more so than the other waves: the average age of death among women was 58.32 years compared with the overall average over all four waves at 58.65 years, while the average age of death among men was 60.39 years compared with 61.23 over all four waves.
The youngest person on Momentum’s books dying of Covid was a 29-year-old male, and the oldest an 89-year-old male.
Body weight was an important underlying factor. At an online presentation of its claims statistics, Momentum's head of claims, Nirusha Naidoo, said the figures showed that Covid-19 was more severe among people with a body-mass index (BMI) of more than 28. "Research shows that people with a higher BMI often have comorbidities. Being in that obese range, you're looking at hypertension, high cholesterol and diabetes. And that did play a role in how sick you got," Naidoo said.
The pandemic tested the resilience of the life insurance sector in South Africa like little before it. Liberty executive for retail solutions, David Jewell, said: "The effects of the Covid-19 pandemic became very real during the year. This was something we had anticipated, and we were able to be there for our clients during this difficult time. The pandemic demonstrated the value of insurance in that it was a completely unexpected event and a reminder that life doesn't always follow a predictable course."
Repudiated claims
Momentum and Liberty each reported a small percentage of repudiated claims: Liberty paid out 93.6% of claims received from clients during 2021, while Momentum paid out 94.28%.
At Momentum 5.34% of claims were repudiated because they did not meet the benefit condition, 0.31% because of exclusions, 0.06% because of non-disclosure, and 0.01% because the deaths were suicides that occurred within the first two years of the policy.
At Liberty, claims were repudiated for the following reasons: the claim did not meet the criteria (5.1%); the condition was not covered (0.9%); exclusions (0.4%); and non-disclosure (0.4%)
Lisa Gibbon, divisional executive for onboarding at Liberty, said: "The importance of full-disclosure should be a priority conversation that all insurers should be having with their clients and advisers as often as possible. Not only will it help to reduce the occurrence of non-disclosure identified at claim stage, but it will also ensure that clients receive their payout when they need it most.
"At Liberty, we've placed a strong emphasis on ensuring that advisers and clients focus on providing true and accurate information during the underwriting process. We've also been encouraging advisers and clients to continuously keep us informed of any life-changing medical and lifestyle changes that would impact their policies."
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