Un­der 45s

Finweek English Edition - - MONEY - SAN­LAM LIB­ERTY MO­MEN­TUM METROPOLI­TAN Tandisizwe Mahlutshana

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.

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