Financial advisers to consider highest claim risks by life stage and province

01 April 2017 Liberty

Protecting customers from debilitating life events like severe illness, death and even retrenchment is one of the key functions financial advisors need to deliver for the financial well-being of their customers.

The challenge is that risks vary depending on your age and where you live in South Africa.

Disaster strikes
Many people believe that misfortunes will not happen to them. But when you consider the statistics, the importance of insurance protection against debilitating events becomes quite clear, especially when you look at the main cause of claims.

To further help financial advisors understand the level of risks consumers are facing according to their age and what province they live in, Liberty released its Claim Statistics for 2016.

The insurer paid out R4.3 billion in valid claims in the year under review, 13% more than 2015. This amounts to R17 million every working day.

These statistics reveal concerning trends in health and lifestyle risks with cancer and cardiovascular conditions being the main causes.

Understanding risks

Liberty has developed segments to more accurately represent its customer-base. This includes Young Achievers, Young Parents, Established Providers and Empty Nesters.

Cancer was the main cause for claims for all segments at 15.2% of claims for Young Achievers, 24.4% for Young Parents, 26.2% for Established Providers and 23.31% for Empty Nesters.

The most common type of cancer for women was breast cancer, and for men it was prostate cancer. The proportion of breast cancer claims as reported by female clients has increased from 22% (2014) to 32% (2016).

Cardiovascular was the second most common cause overall – 9% for Young Achievers, 14.72% for Young Parents, 22.18% for Established Providers and 23.67% for Empty Nesters.

Understanding the main risks by province

The main cause of claims in each province differ significantly and it is important for financial advisers in each area, to understand the cause of claims in each province, and to better serve and protect their customers from the most common risks.

Motor vehicle accidents dominate

Although Liberty’s Claim Statistics for 2016 reveal that the biggest cause for claims is cancer, in Gauteng, the second biggest cause for claims is related to motor vehicle accidents.

Sadly, 74% of vehicle accident claims were death claims, making this the second biggest cause for claims in this province.

Young Achievers, also known as millennials, were the ones who made up the bulk of the 74%. The number of males that had to claim as a result of motor vehicle accidents was significantly higher than females.

It is concerning to note that such a large portion of claims for Young Achievers are motor vehicle accidents resulting in deaths. Adopting safer driving techniques can reduce this serious risk and avoid potentially dangerous situations on the road.

Western Cape retrenchment claims

The 2016 Statistics for the Western Cape falls in line with results from the rest of the country, with cancer dominating the claims environment at 30.44% of total claims in the period under review.

However, there was a noteworthy increase in retrenchment claims particularly amongst women at 60% while men were at 40%. In addition, Young Achievers also saw higher claims for retrenchments at 11.7% and motor vehicle accidents at 9.7%.

At this stage in your life, your ability to earn an income is your biggest asset. This retrenchment statistic emphasises the importance of income protection policies. If you are retrenched you need to maintain your current lifestyle and meet your financial commitments.

Cardiac and Cardiovascular in KZN

The biggest cause for claims in Kwa-Zulu Natal (KZN) was related to cardiac and cardiovascular events. This is in contrast to the rest of the country where cancer related claims were more prevalent in the majority of provinces.

Sadly, KZN also had the highest claims for murder related deaths in 2016 and it experienced an increase in suicide related claims. The majority of suicide victims were farmers. The continuing drought may be the cause of the increase in suicide related deaths in the province.

At every stage in your life it is important to remain active, visit your doctor regularly and keep a close eye on your health.

Suicide in Northern Cape and Free State

Liberty’s Claim Statistics for 2016 reveal surprising results from the Free State and Northern Cape provinces.

The biggest cause of claims in the Free State was cancer at 24%. An increase in musculoskeletal diseases and disorders as well as policy protection claims was also recorded.

The highest cause of claims in the Northern Cape was cardiac and cardiovascular related, while the most regrettable cause for claims is suicides among farmers older than 55. The continuing drought may be the cause of the increase in suicide related deaths in the province.

The primary effect the drought has brought upon the farmers is a drop in income. The farmers also had to lay off their workers because they ca not afford to pay them. The situation has become so dire that they are forced to auction their farms to try and pay off loans.

Insuring against life’s uncertainties is only a part of the solution financial advisers provide. Providing clients with a peace of mind that they are covered is priceless.


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