In its latest Claims Statistics Report, Old Mutual has revealed that it paid R14,7 billion in risk cover claims across the group’s South African operations throughout 2022.
The payouts include underwritten (mostly retail life, disability and illness claims), non-underwritten (mostly retail funeral claims) and corporate claims and represent a year-on-year decrease of 30,7%, primarily due to a decline in Covid-19-related claims.
Non-underwritten claims amounted to R2,7 billion, corporate claims were R4,6 billion, and underwritten claims stood at R7,3 billion – the latter compared to R11 billion the previous year, indicating a return to the insurer’s pre-covid claims payout trends.
“The decline in overall payouts of around R6,5 billion was expected, as 2021 was an exceptional year for claims due to the surge caused by Covid-19, and we are now starting to see a return to normal,” says John Kotze, Head of Retail Protection Product Marketing at Old Mutual. “However, claims paid are still higher than pre-Covid-19 numbers (2019 R11.3 billion), showing our commitment to providing for our customers,” says Kotze.
The Claims Statistics Report summarised the group’s underwritten risk cover claims as follows:
- R5,8 billion in Death cover claims
- R474 million in Disability cover claims
- R946 million in Illness cover claims
- R5 million in Retrenchment cover claims
Old Mutual also reports a payout ratio of 96% in underwritten claims and an average payout of R29,2 million every working day.
Rejection of Claims
The insurer reveals the reasons behind 4% of its claims not being paid, mainly due to customers not meeting the criteria for their claim, which Old Mutual refers to as “Benefit Definition Not Met”. “Fraud” is another reason for the repudiation of claims, followed by “General Exclusion”, “Non-Disclosure”, “Suicide Exclusion”, and lastly, “Underwriting Exclusion”.
Kotze advises, “It’s important for customers to understand what they are covered for and to always be open and honest with their insurer to ensure a successful claim. Financial advisers are trained and available to explain your policy contract and guide you through the claiming process if you need.”
Insurance Trends for Different Sexes
Statistically, males make up a higher proportion of claims, as has been the case over the years, with the overall claims split being 56% male and 44% female. The ratio between sexes has remained similar over the years and is consistent with the extent of benefit coverage between males and females.
Males had the youngest (22 years old) and oldest (96 years old) claimants and an average claim age of 59. The youngest female claimant was 23 years old, the oldest 95, and females had an average claim age of 58.
The top three claim categories for males were cancer, cardiovascular disorders and trauma, whilst for females, the top claim categories were cardiovascular disorders, cancer and central nervous system disorders. The decline in the prominence of respiratory diseases for both sexes is further evidence of the recovery from Covid -19.
Rheumatoid arthritis appeared in the top 5 claims under the illness benefit among females for the first time in five years. This is due to an improvement in claim definitions and Old Mutual making them more lenient.
Severe Illness
The BIG 4 – cancer, coronary artery bypass graft (CABG), heart attack and stroke – contributed to 70% of all Severe Illness claims. Cancer made up most of these claims at 63%, followed by heart attack claims (19%), stroke claims (10%) and CABG claims (8%).
CABG claim numbers saw an increase from 2021, which was primarily attributable to males. Female claims for heart attacks also saw a rise from 2021. Kotze notes the role of lifestyle choices in managing the risk of severe illnesses.
“Lifestyle diseases are health conditions primarily caused by unhealthy lifestyle choices and behaviours. These diseases are often chronic and develop over time due to factors such as poor diet, lack of physical activity, tobacco use, excessive alcohol consumption, and stress. Preventing lifestyle diseases largely involves adopting healthy habits and making positive lifestyle changes,” he notes.
Breast cancer was one of the leading causes of all female cancer claims, with 90% falling under the illness claims category. It was also revealed that females start claiming for breast cancer at relatively younger ages, with higher claiming rates sitting between the age of 40-50 at 27%, 50-60 at 32% and 60-70 (29%).
Prostate cancer was one of the significant contributors to male cancer claims, with most of the claims being by older men (above age 50). As have been in the past, heart attacks and prostate cancer continue to be of concern in males.
Psychiatric Disorders
The report revealed that 95% of all the Psychiatric disorder claims received were filed under the Disability claim category. The top three claim events were: major depression (46%), post-traumatic stress disorder (PTSD) (33%) and bipolar mood disorder (7%). The age bands that claimed the most were the 50–60-year-olds (48%) and 40–50-year-olds (31%).
Retrenchment
Age groups with the highest retrenchment claims are those in the 30 to 40-year-old and 50 to 60 years old categories, signalling a change from the 40 to 50 age group in 2021. The split between men and women also changed to 50-50, in contrast to 60-40 for 2021.
“Our payout performance this past year underscores why we are regarded as one of the most trusted insurance providers in South Africa and beyond. With a 178-year legacy of prioritising people’s financial protection needs, we remain committed to being there for our customers when they need us the most,” concludes Kotze.
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