One has to wonder whether those who are so quick to criticise the industry in isolated cases ever take note of the good news. Not that I am implying that death is good news; its just that the bereaved can take solace out of the provision made by the deceased to cater for them after his or her demise.
The Old Mutual Claims Statistics Report for 2020 reveals that the green machine paid R14 billion in risk cover claims in 2020, a year-on-year increase of 24%. Despite a challenging and constantly evolving landscape, it upheld a total pay-out ratio of 98% in underwritten claims.
Insofar as underwritten risk cover claims are concerned, there was a significant rise of 22%, compared to the previous 3-year average increase of 9.6%. The 2020 claims are made up of the following:
- 17 billion in Death cover claims
- R871 million in Illness cover claims
- R436 million in Disability cover claims
- R13 million in Retrenchment cover claims
Causes of claims
While cancer & tumours (23%), cardiovascular diseases (19%) and accidental death (19%) remained the top three causes of death claims paid, there was a 61% spike in respiratory system disorder claims, mostly attributed to the widespread Covid-19 infections.
Industry figures
Earlier this year, ASISA noted that policyholders and beneficiaries received claims and benefit payments worth R522.7 billion from South African life insurers in 2020. These payments included retirement annuity and endowment policy benefits as well as claims against life, disability, critical illness and income protection policies.
This represents an increase of R31.7 billion from the R491 billion injected into the economy in 2019 through payments made to policyholders and beneficiaries. The significance of the size of the life industry’s claims and benefit payments in 2020 becomes evident when considered against the Government’s R335.2 billion Social Development budget for 2021.
As far as the resilience of the South African life insurance industry is concerned, it is worth noting that it completed a very challenging year with more than double the legally required capital buffer in place.
We discussed the concepts of fairness and equity in the industry last week. I am sure that the above figures provide ample proof that the industry, and its representatives in the field, are far more intent on caring for clients than fleecing them. Regrettably, it is often chancers who abuse public sympathy and social media to try and bypass the letter of the law (and the contract wording) who harm the industry’s reputation.
As the attorney said: 98% of lawyers give the rest of us a bad name.
