By: Old Mutual
99% pay-out ratio for the fourth consecutive year
The proportion of heart attack claims have increased by 113% since 2016, moving heart attacks from being the least claimed ‘big 4’ illness to the 2nd most claimed.
Old Mutual today announced that it paid R11.3 billion in personal cover claims in 2019, totalling R45 million for every working day during that year. The pay-outs include underwritten, non-underwritten and corporate claims.
Releasing its claims statistics for 2019, the group said it is proud to maintain an impressive total pay-out ratio of 97%, the same as the previous year.
“The Covid-19 pandemic has shown us how unpredictable life is, and why it is important to have adequate cover that protects individuals and loved ones from sudden and life-changing events, whether death, disability, illness or retrenchment,” said John Kotze, Protection Product Head at Old Mutual.
Old Mutual’s claims statistics report for 2019 unpacks their underwritten claims, which amount to R5.33 billion of the overall amount paid. It consists of the following:
- R4.02 billion in Death cover claims
- R739 million in Severe Illness and Physical Impairment cover claims
- R561 million in Disability cover claims
- R10 million in Retrenchment cover claims
Causes of claims
Cancer & tumours (23%), cardiovascular disorders (23%) and accidental death (22%) are the three main causes of death for Death cover claims paid.
Cancer and tumours (48%) and cardiovascular disorders (28%) also showed up top of the list of Severe Illness claims paid for the fourth year in a row, now followed by central nervous system disorder claims at 12%.
Kotze explains that the ‘Big 4’ illnesses made up 73% of all Severe Illness claims, with 67% of them attributed to cancer, 17% to heart attacks, 9% to strokes and 7% to coronary artery bypass grafts.
“Alarmingly, the proportion of heart attack claims have increased by 113% since 2016, moving heart attacks from being the least claimed for ‘Big 4’ illness to the second most claimed for,” says Kotze.
“In the Severe Illness cover category males claimed mostly for cardiovascular disorders (42%) and females for cancer and tumours (60%) with breast cancer being the most common,” he says.
In the Disability cover category:
- Old Mutual paid out 11% of Disability Income cover claims towards psychiatric disorders; this is a significant 59% increase since 2016.
- Under their Disability Lump Sum cover, which applies to conditions that are permanent and irreversible, the company paid out 9% in psychiatric disorder claims, making it the fourth most claimed for condition.
- 83% of all psychiatric disorder claims occur in the age bands 30 to 50, and the majority are working adults in their prime.
“The increase in claims for psychiatric disorders was already emerging pre-Covid-19, and so it is very likely that mental health conditions may increase even more due to the widely reported Covid-19-related stresses. This highlights the importance of having the right cover in place, understanding how your cover works and disclosing all the information you need to, in order to have a successful claim,” explained Kotze.
Only 3% of underwritten claims that were correctly submitted did not qualify for a pay-out.
- 66% of these did not meet the benefit definition, meaning that the condition they claimed for was not as described in their contract
- 18% were due to the customer not disclosing important information
- The remainder were due to suicide exclusion (6%), fraud (5%), an underwriting exclusion (3%) and a general exclusion (2%)
“Understanding your cover and providing full disclosure remains key,” concludes Kotze.