Liberty, South Africa’s largest writer of new risk business between 2002 and 2017, paid R4.46 billion in valid claims in 2017. Every year Liberty releases statistics on what has been paid out to risk policyholders to help financial advisers and clients to better plan for their futures and effectively manage life’s uncertainties
The vast majority of all Liberty claims payments, R3.24 billion, were for Life Protection following the death of a client. R691 million was paid in respect of Lifestyle Protection to help claimants make the lifestyle adjustments required following a critical illness diagnosis or treatment. Just more than R525 million was paid for loss of income protection, including both lump sum R375 million and monthly income payments R151 million. These payments help clients make lifestyle changes and pay monthly expenses following a disability, retrenchment or other impairments which prevent them from earning their normal income.
“Cancer remains the leading cause for claims at 24.3%, followed by cardiac and cardiovascular conditions at 19.8% of all claims,” says Henk Meintjes, Head of Risk Product Development at Liberty.
Cancer affected all age and social groups; making up 16% of all claims for Young Achievers also known as Millennials, 21% for Young Parents, 26% for Established Providers and 25% for Empty Nesters. The top three cancers were female breast cancer, prostate cancer and colon cancer.
Dr Thabani Nkwanyana, Liberty Medical Officer says, “Cancer remains one of the leading causes of death in our society. This is reflected in our Claim Statistics and has been a recurring trend for the past three years. The good news, however, is that cancer treatment is widely available and effective, but works best if the cancer is detected earlier rather than later, so regular check-in’s with a GP are highly recommended.”
Claims by Lifestyle Segments
With the current volatile and tough economy, it is no surprise that retrenchment was the most common cause of claims for Young Achievers, making up 17% of their claims.
Since 2003, Liberty has been the largest writer of new risk business for 15 years in a row, according to the Swiss Re Individual Market Risk Volumes Survey.1
Cardiovascular causes were the second most common cause for claims in three segments at 13% for Young Parents, 20% for Established Providers and 22% for Empty Nesters. Overall, cardiovascular causes were also responsible for the majority of claims paid in respect of men last year.
Strokes or central nervous system disorders also contributed significantly to total claims paid and were responsible for 8% of Young Parents claims paid and 8% of Established Providers claims paid. For Empty Nesters, who are generally older, respiratory diseases and disorders were responsible for 7% of paid claims.
Everybody is at risk
A new inclusion in this year’s statistics report is a breakdown of the five most frequently stated occupations of claimants: 13% of claims came from business people, 10% from managers, 8% from directors, 3% from administrators and 3% from housewives. The diversity of occupation from business people to housewives shows that everyone is at risk of untimely death, disability or critical illness.
The low proportion of claims attributed to housewives and other semi-professional/part time roles may however also be an insight into the risk of underinsurance of these lives. Many working parents may benefit from group cover but not yet have effectively planned for the consequences of a severe injury or the passing of the stay at home parent.
In addition, Liberty’s Claim Statistics for 2017 breaks down the top claim causes for all nine provinces in the country. At least 25% of claims from the Northern Cape came from farmers, and 80% of all claims within the Limpopo region were for life cover. Gauteng saw four times as many brain cancer claims when compared to KwaZulu-Natal and more suicide claims than road accident claims.
Non-payment of claims
Liberty paid out all valid claims submitted but when looking across all benefits of all claims received in 2017:
- 8.6% of submitted claims were for conditions that did not meet claims requirements
- 1.6% of claims were declined due to non-disclosure
As an organisation Liberty has a duty to ensure its clients know what they are covered for and that the plans they put in place to protect themselves and their families are sound.
Liberty encourages clients to familiarise themselves with the claims criteria and to check in with their Financial Advisers regularly, to make sure they have the correct cover in place. Importantly, clients also need to disclose and answer all questions asked in the application honestly and accurately, to ensure that the contract is, and remains valid.
“Sharing these insights is part of our efforts to educate South Africans on the importance of having the correct insurance cover in place. We encourage clients to view their relationship with financial advisers as a long-term partnership throughout every life stage. Liberty pays out all valid claims, and that is how we deliver on our promise.” concludes Meintjes.