Category Life Insurance

Insight into events claimed the most

30 July 2019 Myra Knoesen
George Kolbe

George Kolbe

Claim statistics play an important role in the industry, particularly as statistics provide vital information regarding industry trends. This allows you, as the adviser, to capitalise on areas of interest.

Momentum released their claim statistics for the period of January to December 2018. The statistics reveal that over the last five years, Momentum paid out life insurance claims of R17 billion.

The largest claims 

Over the past five years, the claim amount pay-outs have increased by an average of 9% per year. Momentum paid a total of 11 847 claims in 2018. On average, this amounts to more than R16 million linked to 47 claims, each working day; or more than R2 million per working hour. The total pay-out is 48% higher than the pay-out in 2014, a mere five years ago. 

For the period spanning January to December 2018, Momentum paid more than R4 billion in individual risk claims and R3.6 billion in group life insurance which means that Momentum paid a total of R7.6 billion in risk claims. 

Momentum’s largest claims during 2018 include a death claim of R45 059 793 stemming from cerebral malaria, a critical illness claim of R6 381 408 as a result of a mild heart attack, a disability claim of R62 410 413 for a stroke and an income protection claim of R2 192 097 stemming from Parkinson’s disease. 

An indication of claims

Looking at Momentum’s claims, the four major causes of death were: cardiovascular disease (31%), cancer (29%), unnatural causes (17%) and respiratory conditions (10%). The four major causes of unnatural death claims were motor vehicle accidents (45%), suicide (24%), murder (15%) and other accidents (5%).

Interestingly, 1% of the death claims were for people under the age of 30 and the highest (71%) for people older than 60.

The youngest ages for which death claims were paid in 2018 were 24 (female) and 24 (male). Of this, the oldest ages for which death claims were paid in were 100 (male) and 99 (female).

For every female Momentum client who died in a motor vehicle accident in 2018, five male Momentum clients died in motor vehicle accidents.

In 2018, 93% of all suicide claims were for male clients compared to only 7% for female clients. 

More interesting findings 

For the period under review, Momentum paid 59 terminal illness claims to the amount of R110 million and cancer was the primary cause for most of these claims. The four major causes of critical illness claims were cancer (45%), cardiovascular disease (26%), nervous system conditions (9%) and musculoskeletal conditions (6%). 

Interestingly, 3% of the claims were for people under the age of 30 with 36% of the claims for people aged 50 to 59. If one reviews the critical illness claims by gender for 2018, 57% (male) of all claims fall to critical illness claims with the remaining 43% claims from females.

In 2018, the following percentages and types of cancer claims were paid by Momentum:

54% of female claims were for breast cancer, 38% of male claims were for prostate cancer, 44% of critical illness claims for children were for cancer. 

According to the statistics the four major causes of disability claims were nervous system conditions (22%), cancer (16%), musculoskeletal issues (15%), cardiovascular conditions (13%). 

One percent of the claims were for people under the age of 30, with 47% for people aged 50 to 59 years. 

The four major causes of Momentum income disability claims were musculoskeletal (25%), nervous system conditions (12%), psychiatric or mental conditions (12%) and cancer (10%). Three percent of the claims were for people under the age of 30 with the highest being 36% for the ages 40 to 49. 

During 2018, 31 new longevity protector claims were triggered for disability and critical illness claims causes, starting the countdown to their future longevity protector pay-outs. 

Identify the risk factors 

“The claim statistics are a reflection of how well everyone is doing their jobs in ensuring the financial wellness of our mutual clients. It provides insights into which conditions or events are claimed for most and what advisers should potentially focus on when discussing risk needs with their clients,” says George Kolbe, Head of Marketing at Momentum Life Insurance. 

“Advisers should identify the risk factors (inactivity, obesity, etc.) that they can discuss with their clients in an attempt to reduce their risk. Clients should be encouraged to live active and healthy lives and reap the benefits. Many risk claim events can be avoided by small lifestyle changes. 

“The high percentage of claims that are paid across the life insurance industry is an important point to share with clients so that we can build trust in the industry and show the good work that is being accomplished for clients and their families. An important message from the claim statistics is that even though it represents a small portion of claims, we can improve clients' claim experiences (and their impression of the life insurance industry) if even more care is taken to ensure full disclosure at underwriting stage. This will reduce the number of repudiations at claims stage, leading to better claim outcomes for clients and an improved reputation for the industry,” concluded Kolbe. 

During 2018, Momentum Myriad paid 95% of all claims submitted across all benefits. During the year under review, Momentum Myriad repudiated only 0.46% of all claims. The Long Term Insurance Ombudsman received approximately 5 978 cases relating to long term insurance complaints. Approximately 249 cases involved Momentum Retail Life Insurance and only 121 of these cases related to Myriad claim complaints. None of these cases transpired in a ruling against Momentum. 

Editor’s Thoughts:
The Momentum claim statistics give some good insights to financial advisers on the trends in the life industry space. The majority of claims for 2018 were paid to clients between the ages of 40 to 49 and 50 to 59 years and longevity is also becoming a reality. Is this an industry wide trend? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts

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