Building trust in the industry

George Kolbe, Head of Marketing at Momentum Life Insurance

Annual pay outs

Changing patterns on critical illness

Largest claims during 2017

Longevity protector pay outs

Momentum individual risk claims

Multiple claims

Oldest ages for death claims

Total pay out

Claim statistics play an important role in the industry. Particularly to advisers as statistics provide vital information regarding industry trends, which allows them to capitalise on areas of interest. Momentum recently released their claim statistics for the period of January 2017 to December 2017.

Some of the largest claims

Over the past five years, Momentum paid out life insurance claims in excess of R15 billion and the claim amount pay outs have increased by an average of 11.2% per year.

Momentum paid a total of 11 461 claims in 2017. On average, this amounts to more than R15 million linked to 46 claims, each working day.

For the period spanning January to December 2017, Momentum paid more than R3.7 billion in individual risk claims and R3.8 billion in group life insurance which means that they paid a total of R7.5 billion in risk claims.

Some of Momentum’s largest claims during 2017 include a death claim of R36.7 million stemming from a motor vehicle accident, a critical illness claim of R5.4 million as a result of a heart attack, a disability claim of R9.9 million for mental disorder and an income protection claim of R321 000 stemming from a kidney disease.

During 2017, the total individual claim pay outs for Momentum Retail Insurance was 42% higher than the pay outs in 2013, a mere five years ago.

In 2017, Momentum had 131 clients who had a claim on more than one type of benefit, typically resulting from the same claim event. The top four combinations for multiple claims are critical illness and longevity protector – critical illness benefit (25%), critical illness and disability (25%), disability and death (11%), critical illness and death (10%).

An indication of claims

Looking at Momentum’s claims, the four major causes of death were cardiovascular disease (40%), cancer (18%), respiratory conditions (11%) and nervous system conditions (9%). The four major causes of unnatural death claims were motor vehicle accidents (40%), suicide (30%), murder (15%) and other accidents (12%). Interestingly, 0.4% of the death claims were for people under the age of 30 and the highest (71.6%) for people older than 60.

The youngest ages for which death claims were paid in 2017 were 22 (female) and 21 (male). Of this, the oldest ages for which death claims were paid in were 104 (male) and 101 (female). Interestingly, Momentum noted that the oldest person, for whom they paid a death claim during 2017, was a 104-year-old man.

For every female Momentum client who died in a motor vehicle accident in 2017, five male Momentum clients died in motor vehicle accidents.

A positive trend emerging

In 2017, Momentum saw a 25% increase in the number of critical illness claims paid and a 21% increase in sum assured pay outs. For the fourth consecutive year, Momentum has seen an increase in the number of claims for early stages of critical illnesses. This is viewed as a positive trend that is emerging as it creates the opportunity for clients to seek medical interventions earlier.

For the period under review, Momentum paid 66 terminal illness claims to the amount of R105.7 million and cancer was the primary cause for most of these claims. The four major causes of critical illness claims were cancer (38%), cardiovascular disease (21%), nervous system conditions (12%) and musculoskeletal conditions (5%).

Interestingly, 2% of the claims were for people under the age of 30 with 33% of the claims for people aged 50 to 59. If one reviews the critical illness claims by gender for 2017, 64% (male) of all claims fall to critical illness claims with the remaining 36% claims from females.

The importance of definitions

According to the statistics, in 2017, 47% of the disability claims were paid under the functional impairment definitions, highlighting the importance of having functional impairment definitions included in a disability benefit. The four major causes of disability claims were nervous system conditions (34%), musculoskeletal issues (21%), cancer (11%), psychiatric or mental conditions (10%). One percent of the claims were for people under the age of 30, with 42% for people aged 50 to 59 years.

The major causes of Momentum income disability claims were musculoskeletal (32%), cancer (9%), fractures and hospitalisation (8%). Two percent of the claims were for people under the age of 30 with the highest being 38% for the ages 40 to 49. 

With longevity being a reality, 2017 was the seventh consecutive year during which Momentum paid claims for people older than 100 years. 

Improved reputation for the industry

“The claims statistics are a reflection of everyone’s dedication in ensuring the financial wellness of our mutual clients. It provides insight 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 potential risk factors such as, inactivity and obesity, that they can discuss with their clients in an attempt to reduce their risk levels. Clients should be encouraged to live active and healthy lives and reap the benefits. Many risk claim events can be avoided by making small lifestyle changes”, Kolbe stated 

“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 continue to build trust in the industry and showcase what is being accomplished for clients and their families. 

Another vital aspect that should form part of a financial adviser’s discussion with their clients is the importance of full disclosure from clients at underwriting stage. This will reduce the number of repudiations at claims stage, leading to better claims outcomes for clients and an improved reputation for the industry”, Kolbe concluded. 

During 2017, Momentum paid 94.9% of all claims submitted across all benefits. During the year under review, Momentum repudiated only 0.4% of all claims. The Long Term Insurance Ombudsman received approximately 5 435 cases relating to long term insurance complaints. Approximately only 262 cases involved Momentum Retail Insurance, a 17% improvement from 2016. None of these cases transpired in a ruling against Momentum. 

Editor’s Thoughts:
The Momentum claim statistics give vital insight to advisers. The majority of claims for 2017 were paid to clients between the ages of 40 to 49 and 50 to 59 years. Is this an industry wide trend and would you agree that the latest claims statistics paint independent financial advisers in a good light? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.