Insurer Sanlam says it paid R4.75 billion in total claims in 2020, with R3.97 billion for death and funeral claims; R398.9 million for disability, loss of income and impairment claims; and R386 million for severe illness and injury claims.
Petrie Marx, Product Actuary at Sanlam Individual Life, said: “Covid-19 has been a tough time for many people, and we extend our deepest condolences to those who have lost family and friends. Our priority is to be the partner our clients need.
“In Sanlam Individual Life, we paid out R458.95 million in pandemic-related claims in 2020. With the second wave, we have surpassed this significantly and already paid out R622.66 million for Covid-19 claims in Q1 of 2021.”
The number of claims for Covid-19 fatalities in 2020 for Sanlam Individual Life was initially relatively low, with most Covid-19 claims being for sickness and income protection. Claims for death and funeral benefits increased to make up the majority in December 2020, January 2021, and February 2021.
Following the second wave, the first three months of 2021 saw significantly more death and funeral claims, with the Individual Life business paying out its highest number of Covid-19 claims in any month in February 2021: R8.25 million for sickness and income protection and R422.73 million for death and funeral claims.
“It’s clear the second and third waves are having a greater impact on our Individual Life client-base. But it should be noted that Sanlam Sky and Sanlam Corporate were already hit hard in wave one,” said Marx.
In 2020, death claims resulting from ‘diseases of the respiratory system’ increased from 11% in 2019 to 21%, the insurer said.
Death claims data
Covid-19 was also the single biggest factor behind the 60% year-on-year increase in funeral claims. The pandemic also had less obvious implications, including 60% fewer claims under the accidental death benefit. At the same time, lump-sum disability claims for mental disorders went from 8% in 2019 to 19% in 2020.
“Aside from the increase in claims resulting from Covid-19, the main effect we saw in 2020 was a decrease in accidental claims for all benefits. This may well have been the result of the strict lockdown regulations. It was also evident in the breakdown of disability claims.
“Covid-19 has had a massive impact on people’s mental and financial wellbeing, although it’s difficult to make a direct link from just one year’s statistics,” said Marx.
He noted that the 2020 claim statistics did not include the impact of the second and third waves, so Sanlam expects to see a different outcome in 2021, where lockdown laws were less stringent, and its main client-base was more affected.
“There is also speculation that 2021 may see an increase in claims as a result of late diagnosis of, say, cardiovascular disease or cancer, or from people suffering from “long-Covid”, but we have not yet seen this coming through in our claims,” said Marx.
In total, Sanlam Individual Life paid R29.95 million in claims for people being booked off work for Covid-19. This hints at what absenteeism may have cost the country.
Positive Covid-19 cases have again peaked in the third wave South Africa experienced over the last few weeks, and Sanlam said it is currently experiencing an influx of claims.
The Sanlam Individual Life claim statistics also pointed to the other main causes of severe illness. “Cancer remains the main cause of severe illness claims; in the last six years, it’s accounted for 60% of all the severe illness claims paid annually. We’re also seeing trends from previous years continue, like the continued rise in breast cancer in women,” said Marx.
Disability claims data
Sickness claims data