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Liberty’s Claim Statistics for 2021 show significant increase in claims due to COVID-19

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In 2021 Liberty paid out a total of R10.12 billion in claims under its flagship Lifestyle Protector policy to 43 600 individual clients and their beneficiaries.  

These payments represent a 59.6% increase from the previous year, 2020, when Liberty paid out R6.43 billion in claims. The substantial rise was due to the cumulative effects of the two most damaging waves of COVID-19, the Beta wave in late 2020 and the Delta wave in mid-2021; coupled with all the other existing risk events that clients are ordinarily exposed to outside of the virus.

“The effects of the COVID-19 pandemic became very real during the year. This was something we had anticipated, and we were able to be there for our clients during this difficult time. The pandemic demonstrated the value of insurance in that it was a completely unexpected event and a reminder that life doesn’t always follow a predictable course,” says Liberty Executive for Retail Solutions David Jewell.

In total, COVID-19 related claims amounted to R3.47 billion, paid out to clients and their families who were affected by the pandemic. Over 61% of these claims were related to Life Cover for mortality events.

These included funeral claims as people grieved their loved ones.  

Total  Proportion
Covid-19 21.2%
Cancer  20.7%
Cardiovascular disorders 17.4%
Respiratory disorders 9.4%
Stroke  4.4%
Top 5 causes 73.1%
All other causes 26.9%

 

Cancer and cardiovascular claims

While COVID-19 claims made up 21.2% of all claims in 2021, cancer remained a significant disease as well, making up for 20.7% of all claims during this time.

For men, prostate cancer was the most common, making up almost 29% of all male cancer claims. While for women, breast cancer was the most common, making up 38% of all female cancer claims.

After cancer, various heart related conditions also took their toll, making up 17.4% of all disease claims.

“Cancer and many heart conditions can in part be understood as lifestyle related conditions, and this reflects on the health challenges faced by many South Africans,” says Liberty’s Chief Medical Officer, Dr Dominque Stott

Total

Proportion

Breast

18.4%

Prostate

15.4%

Skin

11.0%

Colon and Rectal

10.7%

Leukaemia

5.9%

Top 5 causes

61.4%

All other causes

38.6%

 

Female

Proportion

Breast

38.0%

Skin

10.2%

Colon and Rectal

7.5%

Leukaemia

4.9%

Lung

4.5%

Top 5 causes

65.1%

All other causes

34.9%

 

Male

Proportion

Prostate

28.4%

Colon and Rectal

13.4%

Skin

11.8%

Lymphoma

6.9%

Lung

4.9%

Top 5 causes

65.4%

All other causes

34.6%

 

Retrenchment

In 2021 retrenchment numbers started stabilizing, staying mostly constant throughout the year. The numbers were not as high as in 2020, yet retrenchment remains higher than the pre-pandemic numbers seen in 2019, as many ordinary people battle tough economic conditions.

“Unemployment in South Africa continues to be high and this weighs heavily on many South Africans, but the rate of increase has reduced from what was seen in 2020 during the early lockdown stages,” says Jewell.

Retrenchment claims in 2021 formed 7.2% of all Lifestyle Protector claims, compared to 8% in 2020.

Description

Female

Male

Total

Retrenchment 2021

3.7%

3.5%

7.2%

Retrenchment 2020

3.2%

3.8%

8.0%

 

Description

Female

Male

Total

21 – 34

62%

3%

16%

35 – 44

23%

25%

49%

45 – 54

12%

17%

29%

55 – 64

6%

1%

7%

Grand Total

53%

47%

100%

 

Individual Liberty insurance product payouts:

Life Protection

R8 734 222 000

Lifestyle Protection

R799 905 000

Income Protection (lump sum)

R345 885 000

Income Protection (monthly)

R240 683 000

 

Mental health claims

Liberty saw a spike in mental health claims from its clients during 2021, particularly among working people between 35 and 54 years. This has been largely attributed to the stresses brought on by COVID-19.

To assist them, Liberty paid out numerous claims for conditions like major depression which accounted for 45% of all mental health claims, and for schizophrenia which accounted for 15% of all mental health claims.

Other causes of mental health claims were for conditions like anxiety, the inability to work and grief.

“The stresses brought about by the pandemic have brought about long-term effects, including a mental health crisis because understandably people lost loved ones, were retrenched, and are struggling to get by because of the economic upheaval,” says Dr Stott.

Mental disorder

 Distribution

Major depression

45.0%

Schizophrenia

15.0%

Dementia

10.0%

 

Age band

Percentage claims

<20

3.3%

21 – 34

1.7%

35 – 44

33.3%

45 – 54

35.0%

55 – 64

25.0%

> 65

5.0%

 

Liberty corporate claims

For Liberty Corporate, the claims pay out was R3.43 billion. This is 40% higher than 2020. The main cause of the increase was Group Life Assurance claims which increased by 84%. COVID-19 made up 8% of all claims.

Below is a summary for the 2021 corporate claims:

Death Benefits

Group Life Assurance – R2 215 000 000

Family funeral Benefit – R137 000 000

Disability benefits

Lump sum disability – R93 000 000

Income Protection – R758 000 000

Critical illness

Living Assurance – R77 000 000

Credit Life

Credit Life – R154 000 000

Education

The Educator benefit ensured that almost 600 children were able to stay in school in 2021 following their parents or caregivers passing away or being unable to work due to a disability or being diagnosed with a specified critical illness. At least R25 million in claims was paid out through this benefit last year. Added to that, 14% of all claim amounts paid covered supplementary allowances, ensuring that there was provision for other expenses like textbooks, uniforms, and transport to school.

Giving back to clients

Liberty paid R114 million in ADDLIB Bonus pay-outs, a benefit to qualifying clients that receive a cash-back on their premiums under the Lifestyle Protector product suite. This pay-out gave clients the protection and provision they needed in a year where the economic impact of the pandemic was hard felt. Since its inception in 2012, the programme has paid over R714 million in bonuses.

Full Disclosure

Liberty paid out 93.6% of all claims received from clients during the year, offering relief in a time of vulnerability.  Claims not paid were as a result of factors like unmet policy or benefit criteria, and non-disclosure.

Lisa Gibbon, Divisional Executive for Onboarding at Liberty says, “the importance of full-disclosure should be a priority conversation that all insurers should be having with their clients and advisers as often as possible. Not only will it help to reduce the occurrence of non-disclosure identified at claim stage, but it will also ensure that clients receive their pay-out when they need it most.

“At Liberty, we’ve placed a strong emphasis on ensuring that advisers and clients focus on providing true and accurate information during the underwriting process. We’ve also been encouraging advisers and clients to continuously keep us informed of any life changing medical and lifestyle changes that would impact their policies.”

What is non-disclosure?

When medical, financial, lifestyle or occupational questions are answered incorrectly or when important information is omitted during underwriting, this is called non-disclosure. If your financial adviser fills in the insurance application form for you, it is your responsibility to read through everything carefully before signing.