Major insurers like Momentum Metropolitan, Old Mutual, Discovery and Sanlam share similar sentiments that new clients seeking life insurance coverage but are not vaccinated will have higher premium costs, depending on the results of their combined risk profile.
Of course, several factors are taken into account when assessing a person’s risk profile, such as age, health, and existing comorbidities; However, not being vaccinated against the Covid-19 virus could affect applicants for new life insurance policies.
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Proof of vaccination
Momentum Metropolitan’s director of retail life insurance marketing George Kolbe told Moneyweb that the insurer began asking new customers seeking life coverage as proof of vaccination in December 2021.
“Depending on your individual risk profile [age, health, comorbidities and so on], their vaccination status can have an impact on their premiums and premiums can be charged for unvaccinated clients, ”said Kolbe.
Old Mutual’s general manager of protection solutions, Kavir Ramjee, had similar sentiments: “Old Mutual will consider the vaccination status of new clients to offer differentiated prices for life insured products and funeral coverage.”
Read: Covid-19 related death claims continue to hit life insurers
“We will assess each client’s risk against a representative sample of relevant factors, including age and the presence of comorbidities,” he said.
Old Mutual’s position on this is that vaccinates should not be expected to cross-subsidize their unvaccinated counterparts.
“In the same way that non-smokers should not have to subsidize smokers’ insurance premiums, we believe that the same principle should apply to vaccinated clients, who should not have to cross-subsidize their non-vaccinated counterparts”, Ramjee said.
Discovery, which has taken a clear position on vaccine mandates in recent months, says that new customers who refuse to get vaccinated may be subject to a premium burden online with increased risk.
Sanlam takes a slightly conservative position
Meanwhile, Sanlam is taking a slightly more reserved position on premium costs for its new unvaccinated life insurance clients, saying it won’t treat people’s decision to get vaccinated in the same way as people’s decision. of smoking. However, the group did not specifically come out and said that new unvaccinated clients will not face higher charges.
“We do not believe that we are going to divide you, as smokers and non-smokers, into two categories with different premium rates,” Sanlam Group CEO Paul Hanratty told Moneyweb.
In an operational update for the 10-month period ending October 31, the group recorded an excess of claims of R3.42 billion within its Sanlam Life & Savings business for the period, which it said was above from your initial long-term assumptions.
Read: Sanlam sees ‘significantly more death and funeral claims’
However, the release of the group’s discretionary reserves helped offset the impact of excess mortality claims, and as such, the insurer said it will take a risk-based approach to determining premiums for its new unvaccinated clients.
“We are trading at a fairly granular level and it is not simple, you are vaccinated or you are not vaccinated [approach]Hanratty said.
“What we know about vaccination is that it is actually more important for people with comorbidities and at older ages, so we are taking a much more risk-based approach.
“It is not to say that Covid-19 will not kill you if you are not vaccinated at age 25, but the chances of it happening are much lower than for an older person with comorbidities.”
Insurers may reject coverage in some cases.
All of the aforementioned insurers noted that the determination of premium costs for new clients will be determined on a case-by-case basis and that if the vaccine is not given, life insurance costs for new clients will not automatically increase dramatically.
However, in light of this, Momentum Metropolitan has made it clear that it may decline coverage of potential clients if their combined risk profile requires it.
“The [vaccination] the impact on the premium will range from no impact to certain clients to a health burden, or we may decline coverage depending on the combination of the above factors, “said Kolbe.
The decision by insurers to begin considering the vaccination status of new clients when assessing the client’s risk profile comes as companies such as Momentum Metropolitan and Old Mutual recently reported significant profit losses as a result of mortality losses related to Covid-19.
In November, Momentum Metropolitan reported a 63% decline in operating profit for the three-month period ending September 2021, while Old Mutual reported that Covid-19-related death claims erased an estimate of R6.6 billion of your earnings for the nine months that ended. September 30th.
This position also comes as more employers announce workplace vaccination mandates and the National Labor and Economic Development Council (Nedlac), in its 26th Annual summit on Tuesday, expressed support for mandatory vaccinations.
Listen as Fifi Peters talks to Webber Wentzel’s Michael Evans about the legal side of vaccine mandates (or read the transcript):