Survival insurance: Liberty’s claims picture

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The life market is shifting. According to Liberty’s claim statistics for 2018, a significantly higher portion of dread disease and disability claims are being paid out to younger people, with death accounting for only 30% of claims.

According to Johan Minnie, managing executive of Customer and Adviser Experience at Liberty, advances in medical technology and early diagnosis of critical illness are changing the life insurance picture, with claimants and beneficiaries needing to manage the cost of surviving.

In 2018, Liberty paid claims to the total value of R4.69 billion to 28 453 individuals and their beneficiaries. The claim statistics are generated from all the claims received and paid to clients under Liberty’s Lifestyle Protector Solution. This covers a multitude of lifestyle-related risks consumers face, including loss of income due to critical illness, or retrenchment. The increase in survival claims was seen across the country, with Limpopo topping the list at 81.82%, followed by Mpumalanga at 71.95% and the Free State at 70.83%.

The top five claim causes were cancer (27.9% of all claims), cardiovascular disorders (24.3%), respiratory disease (6%), cerebrovascular disorders like strokes (5.7%) and renal disorders (4.3%).

Ursula Torr, lead actuarial specialist at Liberty, says, “As a result of this emerging trend in survival, long-term insurers and financial advisers should consider a good balance of lifestyle protection cover and not just death insurance. Even though cancer remains the highest cause of claims, statistics show people are living longer.”

Dr Thabani Nkwanyana, Liberty medical officer, says: “Cancer remains the highest cause of claims related to critical illness, death and disability. The reality of a cancer diagnosis is that the treatment and recovery after a diagnosis can take many years. We’re seeing more cases where the patient doesn’t die from cancer, chances are high they’ll contract another condition that requires further medical care. This results in a significant financial impact on households in terms of family lifestyle, work and the ability to earn an income.”

Prostate cancer is the most prominent claim cause for men at 32.3% while breast cancer makes up nearly 50% of cancer claims for women. Colon and rectal cancer are the second most common cancer claims in men and women 14.3% and 7.5% respectively. Suicide-related claims increased from 78 in 2017 to 152 in 2018 and make up 2.51% of all claims. Gauteng had the highest number of suicide-related claims at 39.4%. Young parents had the highest suicide rate at 36.7%, followed by empty nesters at 35%, established providers at 25% and young achievers at 3.3%.

Gauteng made up 31.2% of all motor vehicle claims in the country. Only 8.6% of these claims came from young achievers while young parents’ and empty nesters’ claims came in at 43.1% and 31% respectively.

According to the National Cancer Registry of South Africa (NCR), the survival statistics related to different types of cancer are:

  • Bowel cancer – about nine in 10 bowel cancer patients will survive the disease
  • Breast cancer – more than 90% of women diagnosed with breast cancer at the earliest stage survive
  • Ovarian cancer – more than 90% of women diagnosed with the earliest stage ovarian cancer survive
  • Lung cancer – around 70% of lung cancer patients will survive if diagnosed at the earliest stage.