Future complications and potential claims

With ongoing health problems linked to the pandemic causing higher-than-normal mortality rates, what are the key mortality drivers that life insurers and reinsurers will be watching closely over the coming years?

FAnews spoke to Motshabi Nomvethe, Head of Technical Marketing at PPS and Clyde Parson, Chief Innovations Officer at Brightrock, about the key mortality drivers that life insurers and reinsurers will be watching closely over the coming years and what we can expect, in terms of future complications and potential claims. 

Key drivers over the coming years

“The situation regarding the long-term impacts of COVID-19 are still unfolding. When it comes to longer-term trends, we’re carefully monitoring our claims experience to identify any long-term trends. We also liaise extensively with our international reinsurance partners to stay abreast of trends in other insurance markets. Claims continued above normal levels throughout 2022, but in the past few months our claims seem to be levelling out and appear to be trending back to pre-COVID-19 levels,” said Parson.

Many people, according to Nomvethe, report living with Long Covid – a pervasive condition that persists after the acute stage of COVID-19 has passed. The most debilitating and commonly reported are fatigue, breathing difficulty, and cognitive impairment (which can cause brain fog and memory issues). In many cases, the condition has caused a delay in those with Long Covid to return to work or forced them to quit their jobs or reduce the number of hours they can work. 

“The real challenge for patients who survived Covid begins once they leave the hospital. They are likely to face ongoing health problems - from physical to mental and emotional - including post-traumatic stress disorder, breathing issues, depression, problems with daily activities, impending organ damage, and lost jobs,” said Nomvethe. 

“Customer needs are also changing, so insurers need to check that they are offering the right products at the right price to the right customer. Products have to be kept simple. The opportunity is to become customer-centric and provide customers with the digital tools they need to engage with the insurer more effectively,” added Nomvethe. 

“Customer and digital transformation: big data and personalised risk profiling are key. The utilisation of big data enables insurers to offer more individualised products. Simpler and smoother claims and underwriting processes. Customers have grown used to the service levels in other industries and expect similar experiences from their life insurers,” emphasised Nomvethe. 

Complications and claims

According to Nomvethe, some people, especially those who had severe COVID-19, experience multiorgan effects or autoimmune conditions with symptoms lasting weeks, months, or even years after COVID-19 illness. Multi-organ effects can involve many body systems, including the heart, lungs, kidneys, skin and brain. As a result of these effects, people who have had COVID-19 may be more likely to develop new health conditions such as diabetes, heart conditions, blood clots, or neurological conditions compared with people who have not had COVID-19 (source: CDC). 

“On the other hand, there is a growing trend in musculoskeletal conditions as well. With passed lockdown and people still working from home, many people are now suffering from chronic back pain and other similar conditions. This is primarily due to poor posture, not having the correct desk/chair at home, etc. and working long hours/no line drawn between work and after hours,” said Nomvethe. 

“Mental health is also something we should not take for granted. The lockdowns during Covid exposed this even more and insurers should be sensitive to this and review how they assess mental health cases. It should not be a one size fits all, as some conditions are very temporary and respond quickly and well to treatment, whereas some longer-term cases require specialised treatment,” continued Nomvethe. 

So, do South Africa’s life insurers need to rethink product strategies? Yes, Nomvethe said they do. “Offer simple products that address the specific needs of customers; modular product offerings where customers can customise what they need and innovative pricing strategies and something in it for customers. Integrated digital capabilities and technology are required to provide life insurers with the necessary tools to meet the challenges.” 

Challenges and opportunities

Today, Nomvethe said customers want better service while their expectations and demands constantly change. “Intermediaries should prioritise the customer experience. Brokers should provide unique experiences and guidance for each customer to help meet their financial needs. Advisers should know which products/solutions are best for their customer’s specific needs and goals, rather than going for a one-size-fits-all model.” 

“Insurers and intermediaries should embrace technology and use it to their advantage to make them more operationally efficient. However, this should not come at the risk of losing the ‘warm body’ that customers expect,” added Nomvethe. 

Education is also key. “A broker’s role is to educate customers about the industry as a whole, the different benefits and how each fills a different need. Explain the risks involved with under-insurance - what customers have to lose if they are not insured. Brokers should also walk the path with their clients and know what is best for them at each life stage/event. Insurance is not a once-off event,” emphasised Nomvethe. 

A post-COVID-19 world and beyond

“Covid has been a good learning curve for insurers and taught us that we need to plan for the future and the unknown. Insurers did well to support their policyholders during this time and it definitely created a need in consumers’ minds about the need for insurance and being prepared for any eventuality,” said Nomvethe. 

“Insurers can take this a step further and be better prepared, through technology, 4IR and other elements to better prepare themselves for the future. More time can also be spent on financial literacy in general and on consumer education about life insurance as a whole. Improving processes, operational efficiencies, better claims and underwriting experiences, using the latest technology are also worthy investments,” concluded Nomvethe. 

“We do think that opportunities exist for insurers to improve their product and service offerings in response to developments linked to COVID-19 and possible future pandemic events. The key is to be responsive, as the situation continues to develop. For advisers, we would emphasise the need to look for products that offer the most comprehensive and extensive list of objective clinical definitions to ensure that clients are able to claim when they need to,” concluded Parson.

Writer’s Thoughts

COVID-19 definitely changed the landscape in many ways, and as mentioned above, it has been a good learning curve for insurers and taught us that we need to plan for the future and the unknown. Do you believe future claims may still be expected because of the effects of long-COVID? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za

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