Concerns raised by Statistics SA’s report on Tuesday regarding causes of death in the country were rekindled yesterday when the Liberty Group released claims statistics that showed lifestyle diseases and injuries were among the leading causes of insurance claims.
Musculoskeletal injuries, cardiac and cardiovascular disease and other unnatural causes of death or disability consumed a larger share of claims paid out by the group, even though cancer was still the leading cause of all claims.
Last year Liberty paid out R2.71 billion in claims. This was the largest amount the insurer has paid in claims since 2006, the year that statistician-general Pali Lehohla said was the peak year for deaths recorded. On Tuesday Lehohla presented figures that showed fewer people were dying.
The biggest portion of Liberty’s payouts went to life cover claims of R1.86bn. Claims of R439 million were paid for income protection, while claimants for critical illness cover received R414m.
Last year’s claims represented a 16.3 percent increase from R2.33bn paid out in 2012.
Although the figures released yesterday seem to contradict Stats SA’s report that the mortality rate is declining, Liberty confirmed the decreasing death rate, saying the increase in claims was mainly a result of more lives covered by the group as it experienced increased new business sales and fewer policy lapses.
Ryan Switala, Liberty’s head of risk product development, said its claims analysis showed a trend where mortality claims had been decreasing year on year between 2006 and 2008.
“The population mortality statistics are not necessarily comparable to that of [the] insured population. When you look at something like HIV, the progress that has been made with treatment would have a big impact probably in population mortality but not necessarily in the insured population,” he said.
He said the rise in insurance claims paid out, especially for critical illness, were rather as a result of the aging insured population.
But what Liberty’s statistics reaffirmed was that lifestyle diseases were costing more not only for the insurers, but for the economy at large.
“If you look at cancer, cardiac and cardiovascular, central nervous system and strokes, those are the three leading causes on our critical illness (claims). Those three diseases account for nearly 90 percent of our critical illness plan (claims) and all of those are arguably lifestyle related,” Switala said.
Cancer was the leading cause for unnatural death claims, accounting for 39.1 percent of those claims. From life insurance to lifestyle protection policies, cancer accounted for the biggest share of claims payouts and it followed closely in other types of insurance claims where it did not lead.
“The incidents of cancer worldwide are an increasing worry… If you think that a large part of our R2.7bn claims, nearly 40 percent, [is for cancer] that really does give a sense of how significant that is,” Switala said, commenting on the economic impact of managing and treating cancer.
For claims payouts arising from unnatural life events, the striking figures were for musculoskeletal injury, which accounted for 30.2 percent of all unnatural claims and retrenchment claims as far as loss of income was concerned.
Retrenchments accounted for the largest portion of loss of income claims arising from unnatural events at 13.4 percent. Liberty’s income protector pays out when any event that affects a person’s ability to earn income occurs, including disability, injury, illness, retrenchment and maternity leave.
“If you think about other reports that have been on the news with Adcorp recently releasing statistics that retrenchments are at a 10-year high… our statistics are reflecting that,” he said.
But he pointed out that Liberty relaunched its income protection product late in 2011, introducing benefits like retrenchment and terminal illness and, therefore, it was not easy to tell whether claims in earlier years were lower because there were not many policies in place or if retrenchments were really on the rise.
Liberty lost 1.44 percent to close at R124.26 yesterday.