Clamouring for cover - Why insurance claims have sky-rocketed in South Africa

April 17, 2023
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Insurance companies have played a vital role in the COVID- 19 pandemic and, most recently, the disastrous flooding in KZN in April 2022. The assistance and reliance placed on insurance companies amplified the insurance sector's role in the resilience of individuals and businesses during trying times.

The provided are analysed by the insurance companies and yield interesting facts, giving one a holistic view of the various recent unprecedented events.

Between the start of the Covid-19 pandemic in March 2020 and the end of September 2021, South Africa's largest life insurers received 22,544 death claims within 19 months.

During the peak of the third wave, the death claims shot up to 4 times the usual amount experienced by leading insurance companies. All statistics are in the updated death claims dashboard, maintained by the Continuous Statistical Investigation (CSI) Committee of the Actuarial Society of South Africa (ASSA). The CSI utilises data from five of the country's largest insurers, representing 85% of South African individual life insurance premiums.

Recent flooding and covid-19 has had a significant impact on the insurance industry (Photo cred: Filip Bunkens via Unsplash)

The usual number of claims expected for fully underwritten new generation life policies would be between 600 and 700 a month. During the early stages of the pandemic, the number of claims has consistently been above average, and at the peak of the second and third waves reached around 2,700.

According to the official data provided by the National Institute of Communicable Diseases, South Africa has only recorded 90,148 deaths attributed directly to Covid-19 as of September 2021.

However, numbers from the South African Medical Research Council (SAMRC) tracking 'natural' deaths in the country show the figures are likely much higher, aligning with life insurers' statistics.

Excess deaths are recorded deaths by natural causes but do not align with historical trends. At the same time, these deaths are not attributed to Covid-19 on the official record. The peak is in line with Covid-19 infections and deaths and declines accordingly.

In times of trouble for human society, there is often a chain reaction of events. From low vaccination rates to the unemployment crisis, the pandemic may indirectly impact life. Between 3 May 2019 and 4 December 2021, South Africa recorded 275,976 excess deaths.

Although more data is needed on the underlying causes of death, this observation strongly supports that a significant proportion of the current excess mortality observed in South Africa is likely to be attributable to Covid-19.

One cannot say that these figures represent all the deaths due to the coronavirus, leaving the insurance industry with many questions for the future.

(Photo cred: Dibakar Roy via Unsplash)
(Photo cred: Towfiqu Barbhuiya via Unsplash)