Discovery Life paid R9.1 billion in individual life and group life claim in 2022, while R1.9bn was returned to clients in the form of PayBack and Cash Conversion payments.
Covid-19 is no longer a global health emergency, but the residual effect of the pandemic is evident in the increased claims for severe illness, capital disability, and income protection compared to 2021.
“Despite the total value of claims reducing from R11.79bn (2021) to R9.1bn as a result of fewer Covid-19-related death claims, severe illness pay-outs rose by 16%, disability by 38%, and income protection by 6%. 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,” said Gareth Friedlander, Discovery Life’s deputy chief executive.
Discovery Life’s data supports the evidence that Covid-19 is demonstrating significantly lower mortality risk, but the longer-term impact of the illness and the pandemic are expected to persist, with research from the Economist suggesting that global mortality remains elevated by 5% compared to pre-pandemic levels.
In 2022, Discovery Life paid out R626 million for Covid-19-related individual life claims.
“The impact of the pandemic on clients has shifted. We are now processing more claims for living benefits than for life cover,” Friedlander said.
“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.”
Decline in health screening
Another side effect of the pandemic is the considerable decrease in health screening. “Distinct parallels can be drawn between Discovery’s observed health screening deficit and a higher severity diagnosis in severe illness claims,” Friedlander said.
Discovery Life’s chief medical officer, Dr Maritha van der Walt said: “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. This serves as a stark reminder for us all to maintain our health through annual routine check-ups. Early detection of most health conditions, especially severe illnesses like cancer, remains critical for reducing risk and improving outcomes.
“As much as 47% of our severe illness cancer claims are for those where health check screenings are already an established practice at a 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,” Van der Walt said.
“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,” she said.
Increase in claims related to unnatural causes
Data from across the Discovery group shows that people are moving back into pre-Covid-19 levels of activity, Friedlander said.
Physical activity has leapt by 67% since 2020, according to Vitality data. Discovery Bank spend trends data shows increased travel more than pre-Covid-19 levels, partly driven by the cost of travel.
“Our shared data with Discovery Insure and 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. Unfortunately, life claims due to unnatural conditions have also increased with the return of pre-pandemic behaviours,” Friedlander said.
According to Discovery, the spectrum of unnatural death claims was 30% motor vehicle accidents, 30% other accidents, 24% suicide, and 16% because of crime.
There was a temporary reduction in motor vehicle fatalities because of reduced driving during the lockdowns. However, during this endemic period, death claims because of motor vehicle accidents and as a percentage of death claims have increased by 18% between 2020 and 2022.
“Positively, though, Discovery Insure’s Vitality Drive model is demonstrating significant behaviour change with pleasing outcomes: no Diamond status clients were among the driver fatality claims experienced,” Friedlander said.
Also worth noting is the high impact of motor vehicle accidents on death claims for younger clients. “For clients aged 30 and under, 31% of death claims were for motor vehicle accidents, once again demonstrating the importance of responsible driving behaviour, as well as having sufficient risk protection from an early age.”
Mental health concerns
Mental health issues are another worrying trend. Based on research by the South African Depression and Anxiety Group and the University of the Witwatersrand, it’s estimated that 5.5 million more South Africans are dealing with symptoms of probable depression than was case before the pandemic in 2019.
The World Health Organization 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 compared to those individuals not battling such mental health challenges. During the last 10 years, we have paid out more than R3.2bn for mental and behavioural claims, including suicides,” Friedlander said.
Discovery Life’s suicide claims in 2022 were 13% higher than they were between 2019 and 2021, and 24% higher than between 2016 and 2018. Suicide claims have also risen among younger age groups. Women are 1.8 times more likely to claim under their income protection benefits due to mental health than men. On the other hand, men are 2.2 times more likely to die by suicide than women, Friedlander said.
Discovery Life has paid out R47bn in claims to clients since its inception in 2000, and it has paid out more than R10.4bn in PayBacks to clients. PayBack is the insurer’s cash incentive that enables clients to earn back up to 100% of their premiums through the duration of their policies by managing their health and wellness.
