“Early pay-outs for lower severity levels of critical illnesses are featuring more prominently in our claim statistics over time.” This is according to George Kolbe, Head of Marketing for Life Insurance at Momentum.
The 2016 Momentum claim statistics indicate a steady decline in claim pay-outs for critical illnesses in their most advanced stages and a corresponding increase, over time, for earlier stage pay-outs. During 2014, the pay-outs for critical illnesses at the highest severity levels was 58 per cent of the total number of pay-outs and this declined to 43 per cent of the total critical illness pay-outs in 2016. However, over the same period, the pay-outs for critical illnesses at the lowest severities increased from 10 per cent to 37 per cent of the total number of pay-outs for critical illness claims.
Kolbe states that “Early detection of critical illnesses is extremely beneficial for clients because that is when illnesses have the best chance of successful treatment”. Comprehensive critical illness cover is more affordable when selected on cover with tiered claim pay-outs. Being more affordable means that clients can select higher cover amounts without having to compromise on comprehensiveness of cover while still benefitting from increasing pay-outs if the critical illnesses progress. This highlights the importance of benefit design that provides for breadth of cover as a critical component of clients’ holistic financial wellbeing.
Diagram 1: Changing pattern on critical illness pay-outs
Comprehensive cover without compromise
George adds that “Traditionally, critical illness cover has focused on the four most common illnesses namely cancers, strokes, heart attacks and coronary artery bypass grafts (CABG). But other critical illnesses like dementia and Parkinson’s disease can have the same financial impact on clients’ lives. Because of the comprehensiveness of Momentum Myriad’s cover, we see more claims paid for events outside of the “big four” claim events than some other insurers, who provide core critical illness benefits, as an option to their clients.”
Diagram 2: “Big four” claims as a percentage of total critical illness pay-outs per annum
Critical events are timeless
Claim events do not discriminate against age. In fact, the majority of living benefit claims for 2016 was paid to clients between the ages of 40 and 49 years. Claims in this age group will cause a major disruption to retirement provisions if clients suffer a claim event without adequate risk cover in place.
Table 1: Individual risk claims paid from January to December 2016
Multiply clients’ financial wellness
Kolbe points out that “At Momentum we work hard to enhance the financial wellness of our clients. When it comes to claim statistics, this sentiment also rings true because the financial wellness effect on clients, who actively engage with Multiply, is noticeable as an increased average in life expectancy.
Whereas the average life expectancy for the insured population is SA is 67, the average life expectancy for Momentum Multiply members, on the higher status levels, is 89 years; even longer than that of the Japanese population who, at 85 years has the longest average life expectancy in the world.”
He continuous by saying that “Inactivity and obesity are two major contributors to lifestyle diseases. Wellness and reward programmes that encourage and rewards clients when they are physically active and adopt a healthy lifestyle can help reduce the risk of suffering a claim event significantly.”
Longevity can be a risky business
Viewing longevity as a major risk, Momentum Myriad is the only insurer world-wide that offers a longevity benefit that can provide clients with additional pay-outs when they claim and provide them with a Longevity Enhancer pay-out at age 80, if they have never claimed.
According to Paddy Padayachee, Head of Claims and Risk Management at Momentum, “The first Longevity Protector claim was paid to a client in 2016 with a number of other qualifying claims already in process. For these clients, their five-yearly pay-outs are scheduled, ensuring that they will have regular pay-outs to utilise for advanced technology and medical treatments.”
Diagram 3: Future projected Longevity Protector pay-outs
We look for reasons to pay valid claims
According to Padayachee, “Claim statistics are not just about crunching numbers, it is about keeping our promises when it matters most, at claim stage. The design of our claims process focuses on being efficient, transparent and most important, doing everything in our power to give clients a positive, interactive claims experience and our claims track record confirms this. With this in mind, our contributions to clients’ long-term financial wellness have steadily increased with the total amount for claims paid over the last five years exceeding R14.2billion.”
Diagram 4: Claims paid over the past five years
Some of Momentum’s largest claims during 2016 include:
Momentum 2016 claim statistics fast facts:
• For the period spanning January to December 2016, Momentum paid more than R3.6 billion in individual risk claims.
• We also paid R3.6 billion in group life insurance which means that Momentum paid a total of R7.2 billion in risk claims.
• Momentum paid a total of 11 778 claims in 2016. On average, this amounts to more than R14.5 million linked to 47 claims, each working day.
• Over the past five years Momentum Myriad’s claim pay-outs have increased by an average of 9.9 per cent, per year.
• The total claims pay-out for 2016, our highest yet, is 58 per cent higher than the pay-out in 2012, a mere five years ago.
• For every Myriad female client that died in a motor vehicle accident, four male Myriad clients died in a motor vehicle accident.
• During 2016, the office of the Ombudsman received approximately 5 450 cases relating to long-term insurance complaints, about 8 per cent more than in 2015. Only 316 cases involved Momentum Retail Insurance and once again, none of these cases transpired in a ruling against Momentum Myriad.
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