Covid-19 behind huge rise in Sanlam’s funeral claims
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INSURER Sanlam said yesterday that the group saw a 60 percent increase in funeral claims last year, which it attributed largely to the Covid-19 pandemic.
Last year, Sanlam Individual Life paid out 99 percent of all death and funeral claims, amounting to R4.75 billion in total claims. Of the R4.75bn, R3.97bn was for death and funeral claims, R398.9 million was for disability, loss of income and impairment claims, and R386m was for severe illness and injury claims.
Sanlam performed on par at 79.7 points in the South African Customer Satisfaction Index for Life Insurance conducted by Consulta, which surveyed how satisfied customers were with their life insurers last year.
Petrie Marx, an individual life product actuary at Sanlam, said: “In Sanlam Individual Life, we paid out R458.95m in pandemic-related claims in 2020. With the second wave, we have surpassed this significantly, and already paid out R622.66m for Covid19 claims in the first quarter of 2021.”
The number of claims for Covid-19 fatalities last year for Sanlam Individual Life was initially relatively low, with most Covid-19 claims for sickness and income protection. Claims for death and funeral benefits increased to make up the majority in December last year, and in January and February this year.
Following the second wave, the first three months of this year 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. In this month it paid R8.25m for sickness and income protection and R422.73m for death and funeral claims.
Marx said it was clear the second and third waves were having a greater impact on their Individual Life client base. Last year, death claims resulting from “diseases of the respiratory system” increased to 21 percent, from 11 percent in 2019. Covid-19 was the single biggest factor behind the 60 percent year-on-year increase in funeral claims.
The pandemic also had less obvious implications, that included 60 percent fewer claims under the accidental death benefit. This was while lumpsum disability claims for mental disorders rose from 8 percent in 2019 to 19 percent in 2020.
Marx said that besides the increase in claims resulting from Covid-19, the main effect the group saw was in the decrease in accidental claims for all benefits last year.
“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 well-being, although it’s difficult to make a direct link from just one year’s statistics,” said Marx.
He noted the 2020 claim statistics did not include the impact of the second and third waves, so Sanlam expected to see a different outcome this year, where lockdown laws were less strict 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.”
In total, Sanlam Individual Life paid R29.95m in claims for people being booked off work for Covid-19, hinting at what absenteeism may have cost the country. Positive Covid-19 cases have once again peaked in the third wave, which South Africa experienced over the past few weeks. Sanlam was experiencing an influx of claims as a result of the third wave.
But the Sanlam Individual Life claim statistics also said cancer remained the main cause of severe illness claims. In the past six years, it accounted for 60 percent 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.”