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Addressing underwriting and claims issues

28 February 2022 Myra Knoesen

COVID, claims and underwriting going into 2022…

FAnews spoke to Avinash Baboolal, Head of Claims, Hayley Taylor, Head of Underwriting and Shahed Adam, Head of Intermediary Distribution at Hollard Life Solutions, Janet Brodie, Chief Underwriting Officer and Jenny Ingram, Head of Product Development at Momentum Retail Life Insurance and Riaan van Reenen, CEO of Discovery Life, about Long-COVID, the trends emerging among survivors of the virus, underwriting and claims considerations and their advice to brokers navigating these uncertain times.

A marked impact on the industry

“It is indisputable that the COVID-19 pandemic will have indelibly changed the life insurance industry. Looking past the fourth wave, it is now accepted across the board that COVID-19 will be with us indefinitely and will probably transition from a pandemic characterised by acute waves to an endemic disease. Some of the changes the industry has experienced through the pandemic are here to stay. As Discovery Life has been saying for some time now, the SARS-COV-2 virus is likely to become but another virus that we are going to have to live with for the foreseeable future. That is due in part to how very contagious it is: to eradicate the virus we estimate that in excess of 90% of the population will need to be protected against it through primarily vaccinations and secondarily though naturally acquired immunity,” said van Reenen.  

“Fortunately, so long as we can keep vaccination levels high, the proportion of the population that is likely to be materially affected by the virus at any time could become sufficiently low, allowing the disease to be managed, without overburdening health care infrastructure and without a complete shutdown of our economy,” added van Reenen. 

“We envision that continued vaccinations or ‘boosters’ are likely to be necessary for several years to come, as it is with the seasonal flu, and that COVID-19 will continue to be a new health risk factor contributing to mortality and morbidity risk for the foreseeable future. This being the case, there are some key factors to keep in mind, as we progress towards the ‘new normal’,” continued van Reenen. 

The long COVID phenomenon

“Long COVID (Post-Acute Sequelae Sars-CoV-2 infection) is a series of side effects that persist long after the client has recovered from COVID-19. The most common symptoms of long COVID are fatigue, headaches, difficulty concentrating, hair loss, and difficulty breathing. There are several other symptoms that may present themselves given the complexity of the condition. Long COVID is considered a long-term illness from which recovery is likely, but also varies from person to person. It’s important that clients have the right insurance in place. For long COVID, this would be a temporary benefit until such time clients can return to work. If clients can only work on a part-time basis, a partial payment benefit is possible. Clients need to be aware of how long COVID affects them, if they want to ensure they are adequately covered for the possibility of persistent long COVID symptoms,” said Baboolal. 

“Even though the insurance industry is concerned about long COVID, there have already been many studies conducted which provide us with guidance on how this condition can be managed. This entails a holistic approach and includes the physical and psychological elements associated with long COVID. An example of this includes a holistic treatment regime with a physiotherapist, occupational therapist, and psychologist. So, for the moment we believe most long COVID cases can be managed and very few will lead to long term insurance claims,” said Brodie. 

“More than ever before, information is constantly changing. Evidence and treatments are emerging at even more rapid rates. We will continue to underwrite each client on their merits and specific effect that COVID has had on their health and concerning the particular benefits being applied for,” said Taylor. 

In terms of the unvaccinated and policies going forward, Ingram said that “statistics, including our own claim experiences, show that people who are unvaccinated are more at risk of developing severe COVID-19. Even though not all cases of long-COVID recorded are from people who had severe COVID, severe COVID is considered a heightened risk factor for developing long-COVID. As of 1 December 2021, clients who apply for death cover will be asked for proof of vaccination. Depending on their individual risk profile (age, health, co-morbidities, etc.), their vaccination status may have an impact on their premiums, as premiums may be loaded for unvaccinated clients. The impact on the premium will range from zero impact for certain customers, to a health loading, or we might decline cover depending on the combination of the factors mentioned.” 

Underwriting perspectives and trends

“Evidence, both in research and claims findings, supports a need to differentiate between those who have been vaccinated and those who haven’t, in the same way as we do with smokers. This can be revised as and when COVID is manageable. Therefore, this makes insurance available to all, irrespective of their beliefs,” said Taylor.

“There is much we still need to learn about post-COVID-19 syndrome, or better known as long COVID. We do, however, recognise the potential impact on underwriting and claims, especially when considering the symptoms which we know, can be disabling. For this reason, when we underwrite, we specifically ask clients about their COVID-19 experience to determine to what extent they were affected, but the unsettling reality is that even people who have not had severe COVID symptoms can present with long COVID. Long COVID can present weeks or months after the person has presented with initial COVID and it can be intermittent (with clients recovering and relapsing) in nature, which can make it tricky for underwriting. What we have learned, however, is that one of the possible drivers of long COVID is the presence of pre-existing impairments and we keep an eye on that during underwriting,” emphasised Brodie. 

Brokers navigating these uncertain times

“As we navigate the uncertainty, we thank our valued financial advisers for ensuring that clients experience the highest levels of support in a time of uncertainty. The value of sound financial advice increases in times of uncertainty” concluded van Reenen. 

“The uncertain times we're experiencing have amplified the fundamental purpose and role of financial advisers in our marketplace. Uncertain environments create demand for guidance, help and advice, particularly when clients are faced with health and financial risks. Financial advisers' purpose to help mitigate these risks through analysis, planning and needs-based financial solutions helps to create better futures for our clients. Their prominent role in guiding and assisting beneficiaries with claims is exemplary and fosters the required trust and confidence in the services they provide. Long live the financial adviser. Give the best advice, do the best for your client and stay the course,” emphasised Adam.

“Financial advisers should encourage clients to provide full disclosure of any medical issues during the underwriting process. If they have reason to believe that clients might be withholding information or are not sure what they should be disclosing, we encourage them to rather have the clients utilise tele-interviewing opportunities. This will give certainty that clients are quoted correct terms and that complications will not arise at claims stage,” said Brodie. 

“The South African insurance industry is robust and with the help of our international reinsurance partners, we are sure to keep abreast of all the latest research and can apply it in a way that is appropriate for the South African market. Even though it may be challenging, do your best to keep up with changes that insurers may have to make in the coming months as the situation remains very fluid,” concluded Ingram. 

Writer’s Thoughts
It is clear that there are a number of unique challenges, but only time will tell, as there is still so much uncertainty. Like Ingram said, just be sure to keep abreast of all the latest research and apply it in a way that is appropriate for the South African market. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts.

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