• Market Watch

Covid-19 claims break records

- 2022-05-30 00:00:00

Londiwe Buthelezi
Insurers thought 2020 was bad when Covid-19 related deaths pushed claims to record highs. But 2021 has broken that.
The third wave, driven by the Delta variant, proved to be the deadliest of them all. And suddenly what seemed like unprecedented claims for Liberty in 2020 almost doubled in 2021.
The Standard Bank-owned insurer has just released its claims statistics. In 2020, it paid R6.34 billion in claims. In 2021, this shot up to R10.12 billion. Liberty was paying roughly R46 million in claims every working day.
“The third wave, the Delta wave had the biggest impact on claims volumes. Death claims and funeral claims went up drastically. That impact lasted until around August-September. We were still seeing really high numbers,” said Liberty’s head of claims, Tumi Mothoagae.
Mothoagae said even after that, the claims volumes never went back to pre-pandemic levels.
However, after the third wave, the nature of claims started to change. Liberty started receiving more disability, critical illness and income protection claims.
CRITICAL ILLNESS
Under the fourth and the current fifth wave, the insurer’s attention started moving to new emerging trends. Covid-19 still preoccupied the minds of Liberty’s actuaries’ and medical staff, but the critical illness claims that started rolling in worried Liberty more.
In 2020, most insurers saw a marked decline in these kinds of claims. Liberty sounded the alarm back then that more people were possibly skipping their annual check-ups and that this could lead to more serious diseases in the future.
Unfortunately, that prophecy has become a reality. Liberty’s chief medical officer, Dr Dominique Stott, said there’s been an uptick in disability and critical illness claims resulting from cancer.
“That is an international trend as well. Whereas previously the testing that was available to people to go for primary testing – the mammograms, the blood tests for prostate cancer – that was not happening. So, now we are seeing more serious cancers presenting as claims. It’s stages 2, 3 and 4 instead of stage 1,” said Stott.
CLAIMS PAID
After Covid-19, which accounted for 21.2% of claims Liberty paid in 2021, cancer came at a close second, accounting for 20.7% of all claims. In fact, more than half of the R10.12 billion Liberty paid went towards four critical illness claims - cancer, cardiovascular disorders, respiratory diseases and strokes.
Stott said as Covid-19 was on everybody’s lips in the past two years, South Africa took its eye off on these other deadly diseases. In total, R6.65 billion went towards other leading causes of claims and R3.47 billion went to Covid-19 claims.
Even with the emergence of “Long Covid”, Liberty is more concerned about these long-standing diseases and other causes of claims like accidents.
“We are just not seeing as much Long Covid as we thought. We heard a lot of talk about the tsunami of Long Covid, based on overseas stats. We also heard a lot about a tsunami of mental illness claims. We’ve seen some increase. But it hasn’t been unmanageable,” said Stott.
The only thing positive in 2021 was that retrenchment claims started stabilising, staying mostly constant throughout the year.
Kedibone Chuene, the chief specialist for Liberty’s flagship life product, the Lifestyle Protector, said what caught the insurer by surprise in 2020 was that it was mostly young women in their 20s to mid-30s were losing their jobs.
In 2021, the numbers were no longer as high as in 2020. Retrenchment claims accounted for 7.2% of all Lifestyle Protector claims, compared to 8% in 2020.
“I think sometimes it’s very easy for everyone to only see the impact of Covid-19 in terms of people dying. But we should also look at it in terms of how it has changed our lives in terms of how we work, where we work and the survival of the economy in terms of where we draw our incomes,” said Chuene. – Fin24