Momentum statistics point to cover needed for a younger audience
Intelligence is a vital component to the success of any industry. It provides stakeholders with vital information regarding industry trends which allows them to capitalise on areas of high interest and make necessary adjustments to areas of concerns.
This is particularly important in the insurance industry. While certain claim statistics are closely guarded by insurers, they play an important role in the industry. Particularly to the broker and adviser who knows which areas they need to increase capacity in as well as areas where they need to capitalise on increased interest.
Momentum Retail recently announced their claim statistics for the period of January 2013 to December 2013, and during the period under review, Momentum Retail Insurance paid over R2 billion in death claims and more than R2,6 billion across all benefit types.
Focus on a younger age group
When one thinks of critical illness or permanent disability, the age group that this would traditionally affect would be an older age group of 50 years and older. However, recent statistics show that this has changed drastically, which means that brokers and advisers will have to shift their focus.
According to Momentum’s claims statistics, if one reviews the critical illness claims by age group for 2013, 52% of all claims fall within the age bracket of between 30 and 50 years which is viewed as a relatively young age group.
A similar trend is visible with permanent disability claims by age where 65% of all claims were paid to the age group of between 30 and 50 years. "This just emphasises the fact that it is never too early to put the right risk protection in place. In fact, according to advocacy group Arrive Alive, younger drivers are four times more likely to be involved in a motor vehicle accident. Data from the Road Accident Fund (RAF) shows that 40.85% of road user fatalities occur among drivers between the ages of 20 and 35,” says Head of Momentum Myriad, Stephen van Niekerk.
Who would not want to insure their most important asset?
When a consumer is asked if their most important asset is insured, they are quick to point out that their property, household items and vehicles are insured. But often, very little attention is paid to viewing a salary as an important insurable asset. If you do not have earning potential, you cannot pay for these assets.
There has been a major drive towards this over the past few years, and there is significant potential to expand this. Van Niekerk adds that the 2013 Momentum claim statistics revealed that 75% of all income disability claims are also received from the age group of between 30 to 50 years.
"Looking at the number of claims that were received from critical illness, permanent disability and income disability - within the age bracket of 30 to 50 years - it really does suggest that younger people should start planning for their financial wellness as early as possible. This will enable them to make adequate provision if the unthinkable should ever happen,” he says.
Giving back is always a selling point
It seems common place within the insurance industry to reward clients for their loyalty; companies within the short-term industry pay back premiums after a certain number of claim free years, as do certain life insurers.
Momentum is no different. Van Niekerk points out that the company has already allocated R400 million in total towards clients’ Retirement Booster values.
"The allocations are made to clients who have both a qualifying Momentum Retirement Annuity and a Myriad life insurance policy in place. Additionally, Momentum continuously finds innovative ways to allow existing clients to benefit from future product enhancements. As a result, the cost of these enhancements that have been introduced to existing clients, to date, have cost Momentum R200 million. This amounts to a staggering R1,55 billion that was given back to Momentum Myriad policyholders, over and above claims that have been paid,” says Van Niekerk.
He adds that over the past 11 years, Myriad awarded R950 million in Momentum Interactive discounts. This incentive rewards clients with a discount of up to 60% on their insurance premiums, for living balanced lifestyles based on factors such as body mass index, cholesterol, blood pressure or for engaging with Momentum’s rewards programme called Multiply.
It is interesting to note that some of the largest claims Momentum paid out in 2013 include:
• A death claim of R34 million
• A terminal illness claim of R27
million
• A critical illness claim of R4,6
million
• A disability claim of R7,9 million
• An income disability claim of R278
000 per month
Editor’s Thoughts
The Momentum
claim statistics gives keen insight to brokers and advisers who are looking to
grow their client base. What is interesting to note is that cover is needed for
a younger client base as opposed to an older one. Is this an industry wide
trend? Please comment
below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
