South Africa’s largest listed long-term insurers have drawn attention to the high number of unnatural deaths reported in the country in their latest claims data.
In releasing claim statistics for 2017 Liberty, the largest writer of new risk business from 2003 per Swiss Re data, reported disproportionately higher claims for motor vehicle accidents. At 47.5% of total claims Gauteng’s motor vehicle accident claims were significantly higher than that of the Western Cape and KwaZulu-Natal, each of which made up 17.5% of total claims.
Alarmingly, the group also reported higher suicide claims in Gauteng than road accident claims. According to Henk Meintjes, head of Risk Product Development at Liberty, this may be due to the pace of life in the province as well as the state of economy in 2017. “It potentially speaks to the pressure that economics is putting on business – a lot of claims were businessmen and directors of firms.”
In 2016, the group reported a high incidence of suicide claims among farmers in particularly in the drought-ravaged Northern Cape. Meintjes noted a year-on-year increase in suicide claims but said that the group’s book had also grown over the same period. “Is the increase higher than the rate at which our book is growing? Yes, but it is not statistically significant. However, it is sufficient enough for us to think about improving financial literacy and education to help people plan better so that they don’t find themselves in a position where they feel that they have no other option,” he said.
Liberty paid claims to the value of R4.46 billion in 2017, of which life protection comprised R3.24 billion.
Rival insurer Momentum paid out R3.75 billion in individual risk claims, of which R2.77 billion related to mortality. At 40%, the leading unnatural death claim related to motor vehicle accidents. It found that for every one female Momentum client that died in a motor vehicle accident, five male Momentum clients died in motor vehicle accidents. Suicide claims made up 30% of its unnatural death claims, with the group receiving one more claim in 2017 than in 2016, explained George Kolbe, head of Momentum Life Insurance. It also found that murder claims made up 12% of all unnatural death claims.
According to Jenny Ingram, head of Risk Product Development at Momentum, there was an improvement in motor vehicle accident and murder statistics. She said that reducing the high level of unnatural deaths in the country may go some way in reducing the cost of insurance policies.
Despite the relatively high number of unnatural deaths in South Africa, insurers generally pay out for all unnatural causes of death. Policies typically include a suicide clause, where suicide claims are paid out two years after the policy came into effect.
Karin Muller, chief executive of Sanlam Individual Life, said the high incidence of unnatural deaths has led to the creation of accidental products intended to provide cover against accidental causes only but that benefits providing protection against all causes remain the most popular choice. “Even though there are relatively high levels of unnatural causes the price of insurance still offers good value, partly driven by a highly-competitive environment.”
Given that insurance provides financial protection against unknown events, she added that it is important to provide support when unknown events, whether natural or unnatural occur. Sanlam paid out claims to the value of R3.62 billion in 2017, of which life cover made up 82%.
Late last year, Discovery Life said it paid out R3.2 billion in life assurance claims in 2016. At the time, it said more than one in five claims were a result of unnatural causes, with 42% of the unnatural deaths due to motor vehicle accidents. Death due to unnatural causes accounted for more than 70% of claims for those under 30 years of age, with motor vehicle accidents comprising 56% of deaths.
A Discovery spokesperson recently told Moneyweb that it has been able to reduce the risks associated with motor vehicle accidents and associated claims through its telematics-based Vitalitydrive Integrator.
The leading causes of natural deaths reported by the above mentioned insurers include cancer and cardiovascular disease.