Category Life Insurance

BrightRock celebrates 11 years of needs-matched life insurance as total pay-outs hit R4,3 billion

06 October 2022 BrightRock

Business performance highlights:

• Total cover in force exceeds R387 billion*
• Total annualised premium income is more than R2.1 billion*
• Over R4,3 billion* paid out in claims to date

*BrightRock’s business performance figures as at 31 July 2022, including individual life, group risk, and funeral offerings.

In a recent business performance update, CEO of needs-matched life insurer, Schalk Malan, reflected on the impact that COVID-19 has had on the life insurance industry and on the business.

“The COVID-19 pandemic presented many challenges to our industry and BrightRock, like most other insurers, saw a sharp increase in claims. However, along with the challenges, the pandemic also created opportunities for our industry and our business.”

According to Malan, while economic conditions remain tough, all indications are that a more positive picture is starting to emerge. Statistics released by ASISA in July, showed that the number of death claims had fallen significantly relative to the previous six-month reporting period. The IMF recently revised South Africa’s economic growth outlook upwards, and analysts say that business confidence is improving. These positive developments are borne out by BrightRock’s business performance figures.

Record claims

While the COVID-19 pandemic has subsided, BrightRock is still seeing an upward trend in the amount of claims being paid, with Malan predicting another record-breaking claims payment year.

“BrightRock paid over R706 million in claims in the first seven months of 2022, which takes our total claims paid to date to over R4,3 billion. Despite COVID-19 contributing less and less to our death claim payments, the number of claims that we’re seeing is still high relative to a couple of years ago.”

He says the needs-matched insurer has also seen an increase in the number of temporary disability and critical illness claims received over the past few months. This is not just a trend in South Africa, but also internationally, where reinsurers are reporting an increase in claims in these categories as well.

Needs-matched insurance is more relevant than ever

The COVID-19 pandemic has highlighted the importance of life insurance, says Malan. According to ReMark’s 2021 Global Consumer Study, published by SCOR, 56% of South Africans surveyed had a more positive view of life insurance as a result of the COVID-19 pandemic. The same study also found that 38% of respondents had increased the value of their life insurance cover in 2021.

“Clients are facing affordability constraints amid a very challenging economic environment. However, our industry has seen growth amid these challenges, albeit at a lower rate than before. Similarly, in BrightRock’s case, our lapse rates have remained stable throughout the pandemic. This demonstrates that clients see the value of their life cover”, he said.

Although more people recognise just how important life insurance is, many of them are earning less money than they did before the pandemic, with nearly one in three people experiencing a significant reduction in their income since the start of the pandemic, according to the same ReMark study. Malan believes this creates significant opportunity for BrightRock’s needs-matched insurance offering, which is structured to provide clients with more efficient and affordable cover.

“Our needs-matched product not only precisely matches our clients’ needs, but also adds efficiency and certainty to their lives. With BrightRock, on average, clients can buy up to 40% more cover with the same premium rand.”

Meeting clients where they are

Over the past two years, BrightRock has used the opportunity to reengineer its processes to improve its service offering to clients and their advisers. This has included building capacity, particularly within its claims team and processes, and focusing on digital solutions that help to deliver a completely paperless new business journey. It has also highlighted the relevance of the dynamic nature of needs-matched life insurance, which allows clients to change or increase their cover over time, as their needs change. An example that proved powerful during the pandemic was BrightRock's industry-leading extra cover buy-up facility. With this option, eligible clients can purchase additional coverage for themselves without undergoing any sort of medical underwriting. The extra cover buy-up accounts for around 10% of monthly policy issuances, with the use of this facility having increased substantially since 2020.
“In addition to this, we’ve helped many clients to keep their cover over the past year. Where affordability was an issue, we helped them to restructure their cover to meet their current needs,” says Malan.

While market conditions remain tough, Malan is optimistic about BrightRock’s ability to compete successfully.

“BrightRock started in 2011, and we launched our needs-matched product in 2012. This year, we are celebrating ten years in the South African individual risk market, with our first policies having recently reached their 10th anniversary. Despite a very challenging two-year period, we have been able to expand our footprint and offer enhanced service to our clients, and we believe we are very well positioned to continue growing our market share in the period ahead. We look forward to another record-breaking claims payment year and to continuing to make a difference in the lives of our clients."

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