Pandemic Year One: SA Insurers Confirm 23.3% Spike In Fully Underwritten Life Policy Claims
South Africa-based life insurers have confirmed paying more than ZAR20.6 billion against fully underwritten individual life policies in 2020, offering the latest insights into the impact of the Covid-19 pandemic on insurers and society at large.
The Association for Savings and Investment South Africa (ASISA) confirmed that its member insurers had settled 31,853 of the 32,072 claims submitted to them during the 2020 calendar year, with just 0.7% of claims being declined due to dishonesty, fraud or contractual exclusions.
Fully underwritten life policies are issued to individuals who participate in a detailed underwriting process, which typically includes a comprehensive health assessment and review of the applicant’s medical history.
Comparing the last two years offers a chilling insight into the jump in total claims paid under the first year of the pandemic. In 2020, claims were up by a significant 23.3%, with most insurers expecting similar or worse results in the 2021 calendar year. These statistics exclude partially underwritten life policies (where applicants complete a questionnaire but are not required to undergo medical assessments and tests); credit life policies; funeral policies; and group life policies.
“The impact of the pandemic has been so severe that most of us know of at least one person who lost their life because of Covid-19,” said Hennie de Villiers, deputy chair of the ASISA life and risk board committee. “This means that many of us have also witnessed the financial impact on a family when a breadwinner dies. While a policy payout can never make up for the loss of a loved one, it can ease the financial consequences of losing an income earner.”
Source: https://afahpublishing.com/
