Wednesday, January 19

Death claims quadrupled during the peak of the third wave


South Africa’s largest life insurers received 22,544 death claims against fully underwritten life policies * in the 19 months between the start of the Covid-19 pandemic in March last year and the end of September 2021. Although not all claims were for policyholders who passed away As a result of Covid-19, five of South Africa’s largest life insurance companies reported a four-fold increase in death claims at the peak of the third wave versus a book of 2.09 million fully subscribed new generation life policies.

These statistics are contained in the updated Death Claims Dashboard maintained by the Committee on Continuing Statistical Research (CSI) of the Actuarial Society of South Africa (ASSA). Anja Kuys, chair of the ASSA CSI committee, says the dashboard has been updated to reflect data from the three Covid-19 waves recorded up to the end of September 2021. The claims statistics are sent by five of the largest life insurers in the country , which represent around 85% of South Africa’s individual life insurance premiums.

ASSA’s Death Claims Panel was designed to track excess death claims against fully underwritten new generation individual life policies. Excess death claims represent those that exceed expected figures based on historical data. Kuys says the goal is to provide life insurers with consolidated insights into the impact of the Covid-19 pandemic to guide accurate pricing of future policy benefits, as well as to ensure sufficient capital buffers.

Death Claims Against Fully Underwritten New Generation Individual Life Policies (March 1, 2020 – September 30, 2021)

Month Total claims for death
March 2020 636
April 2020 540
May 2020 629
June 2020 852
July 2020 1 256
August 2020 1 105
September 2020 786
October 2020 710
November 2020 703
December 2020 1 546
January 2021 2 709
February 2021 1 131
March 2021 860
April 2021 833
May 2021 985
June 2021 1800
July 2021 2 691
August 2021 1 772
September 2021 1000
Total 22 544

According to Kuys, the pandemic has caused massive upward changes in the number of claims. “While the typical number of claims expected for fully underwritten next-generation life policies would be between 600 and 700 per month, during the 19 months through September 2021, the number of claims has been consistently above average, and in the peak of the second and third waves reached around 2700 “.

Excess deaths

Kuys says that claims for insured lives lost exceeded the expected death rate by a wide margin during all three Covid-19 waves (represented by the red line in the graph below). While statistics from the South African Medical Research Council (SAMRC) show that the actual death rate for the overall South African population (gray line in the graph) also exceeded the expected rate, Kuys notes that more significant divergences are observed for the lives of the insured.

Fountain: Actuarial Society of South Africa (ASSA) Death Claims Control Panel

Kuys notes that there are two main reasons for the higher excess death rate in policyholders with fully underwritten life policies. She explains that the median age of the insured population is higher than the median age of the overall South African population. “Figures provided by the South African Medical Research Council include children, a group that fortunately did not experience excess deaths during the pandemic,” says Kuys.

The second reason, according to Kuys, is that the death rate of the insured population was lower than that of the total South African population before the arrival of the Covid-19 pandemic. This resulted in life insurers seeing a much larger percentage increase in excess insured deaths.

“There are significant differences in insured mortality compared to mortality in the general population, which has always been present in South Africa, even before Covid. Therefore, it is very important that life insurers have access to credible statistics related to the population they insure, to guarantee sufficient capital reserves and prices ”.

Kuys adds that the largest divergence in the number of complaints received than expected was recorded during the second and third waves. During the third wave, life insurers recorded the highest number of claims during July 2021, with excess claims almost four times higher than expected. The excess mortality rate for the general population was only twice as high as expected.

At the peak of the second wave, life insurers received death claims during January 2021 that exceeded the expected death rate by about four and a half times, while the excess death rate for the general population was about two and a half years. half of what is expected.

At the peak of the first wave during July 2020, the excess claims experienced by life insurers of 192.4% was the closest to the general population excess rate of 158%.

Total Death Claims Versus Covid-19 Confirmed Death Claims

Kuys says that of the 22,544 death claims received between March 2020 and the end of September 2021, only 4,163 were due to confirmed Covid-19 deaths. However, he points out that the actual number of deaths from Covid-19 is much higher. She explains that death certificates do not specify Covid-19 as the cause of death and only state whether the cause of death was due to natural or unnatural causes, while data from insurers sometimes classify deaths by Covid-19 such as pneumonia, organ failure, or natural causes. .

Higher than expected natural deaths

According to Kuys, the dashboard indicates that among policyholders the rate of claims for natural causes has remained consistently above normal since the beginning of the pandemic. Natural deaths exclude those caused by accidents, violent crime, and suicide. The graph below shows that the pattern of claims received due to deaths from natural causes closely follows the patterns of the waves of Covid-19 infection.

Fountain: Actuarial Society of South Africa (ASSA) Death Claims Control Panel

Claims for death by age group

According to Kuys, the impact of Covid-19 has been strikingly similar across all age groups, as the number of claims has nearly doubled for the lives of young people, as well as for older ages.

Claims for death by age group (March 1, 2020 – September 30, 2021)

Age band Total claims for death Number of policies Expected number of claims
<20 0 1000 0
20 to 29 161 101,000 100
30 to 39 1 218 514,000 700
40 to 49 3 204 623,000 1,500
50 to 59 5 802 495,000 2 800
60 to 69 6,505 265,000 3 400
70+ 5 654 91,000 3 400
22 544 2,090,000 11 900

The launch of vaccination for adults aged 60 and over began in mid-May 2021, and Kuys says that while it is perhaps too early to comment, it is promising to see the relative increase in death claims for those groups of age is slightly younger. She says this will continue to be monitored during the fourth wave and will be reported as soon as credible statistics are available.

Death claims by gender (March 1, 2020 – September 30, 2021)

Kuys says that the number of reported deaths has almost doubled between men and women.

Gender Total claims for death Number of policies Expected number of claims
Male 15 120 1,087,000 7 900
Woman 7 424 1003,000 4000
Total 22 544 2,090,000 11 900

Anja Kuys, president of the ASSA CSI committee.


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