Life insurers have paid out R63.7bn to policyholders and beneficiaries during the past 12 months ending June 2018, according to the Association for Savings and Investment South Africa (ASISA). The long-term insurance industry statistics reveal an increase of more than R6.3bn in pay-outs from the previous year, with the biggest increase in disability claims.
Claims against individual disability policies increased by 14%, while claims against employer disability cover increased by 21%.
According to Hennie de Villiers, deputy chair of the ASISA Life and Risk Board Committee, disability claims tend to increase when the economy is under strain, since financial stress leads to physical and mental illness.
The good news is that, in the same 12 months, consumers bought 5.7 million long-term insurance policies – an increase of 12% compared to the previous year. This means an additional R13bn in premiums.
De Villiers says the life insurance industry is in robust financial health and will have no difficulty honouring future policy claims. It currently holds assets of R2.88 trillion – an increase of 7% from the previous year.
Industry assets exceed liabilities by R233.5bn, more than five-and-a-half times the legal reserve buffer required. “Our industry has demonstrated financial stability and resilience in a difficult environment, while at the same time consistently honouring benefit payments,” de Villiers said.