Death as a result of motor accidents has topped insurance claims statistics in South Africa among the younger population, specifically those under the age of 45 years. This trend has been revealed by claims statistics of the country’s leading insurers, including Liberty, Momentum and Sanlam.
Claims divisional director at Liberty Life, Nicholas van der Nest, says that just less than one third of the claims paid by the insurer was to people under the age of 45 with more than half of life cover claims for those younger than 35 being as a result of unnatural causes.
“It’s a worrying state of affairs because most of us make use of some form of motorised transport to get to work every morning. At the same time, South Africa has one of the highest mortality rates in the world for motor vehicle accidents, something we simply cannot deny. Even those of us who walk to work are at risk – pedestrian deaths are increasing in frequency every year, especially over holiday periods,” says Van der Nest.
This trend, according to Van der Nest,
< 45 = 15%
20.8% touches on the general sentiment shared by many younger people that they don’t need life cover because they are healthy and fit and regard the possibility of dying to be so low that life cover isn’t warranted.
“While for the most part this might be true, the reality is that accidents don’t discriminate based on health status. An accident can happen to you at anytime, irrespective of your age and health. In fact, proportionally you are more likely to die from an accident when you are young than if you are older.”
According to statistics by the Association for Savings and Investment South Africa (ASISA), life insurance companies paid 99% of all claims made in 2012 against fully underwritten life policies, to the value of R6.8bn. The industry body says this is the first time that consolidated death benefit claims statistics are available in SA. However, 1% of death benefit claims worth R213.8m were declined.
Non-disclosure has been cited as the chief reason for repudiating claims. ASISA statistics show that claims rejected as a result of non-disclosure accounted for a huge chunk (70.34%) followed by suicide
< 44 = 15.3%
< 40 = 56%
< 45 years = 19% (20.11%) while underwriting exclusions stood at 6.13% and fraud 3.42%.
Peter Dempsey, deputy CEO for ASISA says that since the person applying for life cover knows more about the insured risk than does the insurer, the law compels applicants to honestly disclose all information likely to influence the judgment of the insurer when determining appropriate policy terms and premiums.
Policyholders usually resort to nondisclosure in an attempt to secure lower premiums or to obtain cover without exclusions.
Dempsey says having all the facts is important. “It allows the life insurance company to adjust premiums for different risk categories, ensuring that every person pays a fair premium without subsidising someone who presents a greater risk.”
Cancer, which has been the country’s major killer for many years, was again the major leading cause of death claims, though for the older age group, according to statistics sent to Finweek by the three major insurers.
A 2012 study published by medical journal Lancet predicts that SA could see an increase of 78% in the number of cancer cases by 2030. Globally a 75% increase is expected, increasing the total incidence of all new cancer-cases from 12.7m in 2008 to 22.2m by 2030.
* Old Mutual is still finalising its 2012 claims data.