Old Mutual issues R14bn in long-term insurance payouts

Source: Wikipedia.

“In the past year alone, we paid out over R14.1bn in claims across Old Mutual. This means that every working day, we paid out an average of R57m to ensure that our customers and those they love are protected when they need it most. Whether it's a small claim or a major loss, we are here to support them every step of the way,” said John Kotze, head of product.

Insights into underwritten claims

The bulk of the claims paid, sadly, came from deaths at R5.6bn. Traumas being the largest contributor made up 30% of all death claims, including shooting accidents, crime and violence, and motor vehicle accidents, with the latter accounting for 43% of trauma claims. 6% of the death claims were due to suicide. “It is devastating that so many people see suicide as the only option and we encourage people to ask for help,” said Kotze.

“Unfortunately, many trauma claims are a consequence of the current South African environment in which people find themselves. We are positive, along with the rest of the market, that the new government will make inroads into key issues such as poverty and the need for jobs, which we believe will help reduce the level of crime” said Kotze.

Illness claims came in at R926m, 45% of which were due to cancer and tumours, while disability claims were valued at R477m, mostly due to muscular-skeletal disorders. Old Mutual paid R108m in terminal-illness claims to customers while they were still alive so they could make the most of their last moments with their loved ones.

Senior medical officer, Bielqees Salie, said that 71% of Old Mutual illness claims were due to the Big 4: cancer, heart attack, stroke, and coronary artery bypass graft (CABG). “This alarming statistic underscores the impact of non-communicable diseases (NCDs) driven by lifestyle factors. The prevalence of the Big 4 conditions highlights how modern lifestyles contribute to severe health issues,” she said.

Salie added that “poor nutrition, inactivity, poor sleep, and mental-health neglect are major risk factors. Overeating unhealthy foods leads to obesity, a precursor to many NCDs and physical inactivity impairs cardiovascular and metabolic health.”

“Sleep and mental health are often neglected too. Poor sleep quality is linked to an increased risk of heart disease and stroke, while chronic stress and poor mental health contribute to depression and anxiety, raising the risk of severe illnesses,” Salie noted.

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Although there are many genetic factors at play, Salie notes that lifestyle changes can mitigate many risks, especially among younger customers, who are exhibiting a concerning trend in terms of severe illnesses, which shows that lifestyle-related factors are impacting younger people, she added. In fact claims stats show that the youngest breast cancer claimant was only 31 years old.

“Regular medical screenings are essential for early detection and timely interventions and improving health outcomes. Preventive measures should include regular screenings for BMI, blood pressure, cholesterol, and blood-sugar levels to manage risk factors early,” said Salie.

The average claim ages for men and women were similar with men at 61, and women at 60. The figures show that men had a higher proportion of claims than woman at 60% and 40% respectively.

Overall, only 5% of underwritten claims were not paid for reasons that varied from non-disclosure to fraud.

Kotze explained that Old Mutual can stand by its customers by ensuring it has all the right information to charge an accurate premium to ensure its risk is covered, enabling us to settle claims when they come in.

“Second to that, it’s by carefully managing our financial resources to ensure that we have adequate funds to pay claims promptly while maintaining our long-term financial stability that means that we are a reliable, reputable, insurer,” concludes Kotze.