South African life insurers pay more than US$3.3bn in death claims in 12 months to March

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Death claims statistics released by the Association for Savings and Investment South Africa (ASISA) show that 1.02m death claims were lodged between 1 April 2020 and 31 March 2021.

Mr Hennie de Villiers, deputy chair of the ASISA Life and Risk Board Committee, says the tragedy is that this represents an increase of 309,733 death claims compared to the statistics for the previous 12 months when 713,350 claims were received.
The beneficiaries of the policyholders who died in the 12 months to the end of March 2021 would have received death benefits of ZAR47.58bn ($3.3bn) across all lines of risk business. This represents a 64% increase in the value of claims paid by life insurers when compared to the previous 12 month period when ZAR29.08bn was paid.

The statistics reflect claims made against individual life, group life (offered by employers), credit life and funeral cover policies.

Mr de Villiers, referring to the statistics, said, “These are staggering numbers and there is no doubt that COVID-19 has caused many of these additional deaths, whether directly as a result of a person contracting the virus or because people were reluctant to seek medical attention for other serious conditions. The hard lockdown conditions, curfews and alcohol bans would have reduced violent and accidental deaths.”

He says that the significance of the ZAR47.58bn in death benefits paid by life insurers in the 12 months to the end of March 2021 becomes evident when considered against the ZAR60bn paid by the government’s COVID-19 Temporary Employee/Employer Relief Scheme (TERS) to furloughed workers from inception in March last year to July 2021.

Mr de Villiers says that the biggest jump in the value of benefits paid was noted in the individual life space where life insurers reported a 70% increase. In the 12 months to the end of March 2021, life insurers paid ZAR29.11bn to the beneficiaries of individual life policies, compared to ZAR17.12bn in the previous 12-month period.

He notes that the highest increase in the number of death claims took place in the funeral insurance space where the number of claims recorded increased by 216,705 in the 12 months to the end of March 2021.

He states that despite the significant increase in claims paid as a result of the COVID-19 pandemic, the life insurance industry remains resilient and able to support its policyholders and their beneficiaries throughout this difficult time and beyond.

The beneficiaries of the policyholders who died in the 12 months to the end of March 2021 would have received death benefits of ZAR47.58bn ($3.3bn) across all lines of risk business. This represents a 64% increase in the value of claims paid by life insurers when compared to the previous 12 month period when ZAR29.08bn was paid.

The statistics reflect claims made against individual life, group life (offered by employers), credit life and funeral cover policies.

Mr de Villiers, referring to the statistics, said, “These are staggering numbers and there is no doubt that COVID-19 has caused many of these additional deaths, whether directly as a result of a person contracting the virus or because people were reluctant to seek medical attention for other serious conditions. The hard lockdown conditions, curfews and alcohol bans would have reduced violent and accidental deaths.”

He says that the significance of the ZAR47.58bn in death benefits paid by life insurers in the 12 months to the end of March 2021 becomes evident when considered against the ZAR60bn paid by the government’s COVID-19 Temporary Employee/Employer Relief Scheme (TERS) to furloughed workers from inception in March last year to July 2021.

Mr de Villiers says that the biggest jump in the value of benefits paid was noted in the individual life space where life insurers reported a 70% increase. In the 12 months to the end of March 2021, life insurers paid ZAR29.11bn to the beneficiaries of individual life policies, compared to ZAR17.12bn in the previous 12-month period.

He notes that the highest increase in the number of death claims took place in the funeral insurance space where the number of claims recorded increased by 216,705 in the 12 months to the end of March 2021.

He states that despite the significant increase in claims paid as a result of the COVID-19 pandemic, the life insurance industry remains resilient and able to support its policyholders and their beneficiaries throughout this difficult time and beyond.

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