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No new spikes in deaths in 2022, insurance claims return to pre-Covid levels

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South Africa’s big five life insurers are starting to see death claims against fully underwritten life policies return to pre-pandemic levels, according to the Actuarial Society of South Africa (Assa).

The institution says its Death Claim Dashboard, managed by its continuous statistical investigation (CSI) committee, shows that 617 death claims were received in August 2022, the lowest since April 2020 when 540 claims were submitted.

According to Anja Kuys, chair of Assa’s CSI committee, before the pandemic, the usual number of claims for fully underwritten new generation life policies would be between 600 and 700 per month.

The organisation says the number of monthly death claims received by the big five life insurers started to rise from June 2020, peaking at above 2 700 per month in January 2021 and again in July that year.

“The dashboard indicates that of the 31 520 death claims received by the five insurers between March 2020 and August 2022, some 4 706 claims were due to confirmed Covid deaths.”

Kuys says the death claims for policyholders who died due to Covid started dropping to single-digit numbers from March 2022 and fell to zero for the first time in August. But she further cautions that the actual number of Covid-19 deaths was much higher.

“What is clear, however, is that Covid-19 is no longer claiming as many lives as it did in 2020 and 2021,” she adds.

Assa notes that death claims against fully underwritten life policies exceeded the expected number by a significant margin during the first two years of the pandemic. Kuys says that since February this year, the additional death claims over and above the expected number started stabilising between 10% and 20%.

She says that while the death rate for the overall South African population also exceeded the anticipated rate during the pandemic, significant divergences were seen for insured lives.

“Differences in insured mortality compared to overall population mortality were present in South Africa even pre-Covid, because the average age of the insured population is higher than that of the overall South African population,” she adds.

“Th SAMRC (South African Medical Research Council) statistics include children, a population group that did not experience excess deaths during the pandemic. We were, however, surprised that the mortality rate for insured lives exceeded the expected death rate by such a large margin during the first three Covid-19 waves.”

She says the subsequent levelling of the mortality rate of insured lives was equally surprising but cautions that the most recent months may be missing deaths that have not yet been reported.

“While we do not have definitive answers as to why the mortality rate of the insured population relative to before the pandemic has settled in line with the general population, we do believe that there was a higher take-up of vaccinations among policyholders than the rest of the population.”

Assa further notes that the dashboard also shows that the death claims rate for males and females increased by the same percentage in line with the prediction that death claims for male policyholders would be twice that of female policyholders.

Kuys also adds that the impact of Covid-19 has been similar across all age groups with the number of claims having almost doubled for younger lives when compared to older ages.

Nondumiso Lehutso is a Moneyweb intern.

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