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Discovery Life pays R10.5bn to clients in 2023

Discovery Life pays R10.5bn to clients in 2023
19-04-24 / Tommy Jackson

Discovery Life pays R10.5bn to clients in 2023

Johannesburg - Discovery Life published its 2023 claims experience showing positive trends in earlier detection of severe illnesses, influenced by an increase in health screenings, and significant decrease in COVID-19 claims.

In 2023, Discovery Life paid claims to the value of R8.4bn across both Group Risk and Individual Life policies.

The company paid R6.45bn in claims for individual life policies. This consisted of 8,912 unique claims, which includes R3bn in death claims. R1.5bn was paid through the Severe Illness Benefit, R1bn under the Capital Disability Benefit, R613 million under the Income Continuation Benefit, and R298 million under various other benefits. This brings the total value of claims paid under individual life policies to over R53bn to date.

Discovery Life also paid out R2.1bn in Shared-value benefits, rewarding clients for managing their health and finances well, bringing the total paid to clients in the year to over R10bn.

Discovery Life Deputy CEO, Gareth Friedlander commented, "In the two years after the COVID-19 pandemic, we saw the impact of the sharp decline in health screenings translating into a spike in late-stage cancer diagnoses. As a Group, we have invested heavily post-pandemic in supporting a return to health screenings, the results of which are now evident in the 2023 data with a 29% increase in earlier stage cancer claims compared to 2022. The importance of this is that earlier detection can lead to much better prognoses.

"Later-stage cancers are still significantly high, at 31% of all cancer claims. But as a proportion of all cancer claims, less severe claims have increased showing that these are being picked up earlier," says Friedlander.

"It's also worth highlighting that the total amounts we paid through all living benefits are higher than what we paid towards mortality claims, which highlights the relevance of comprehensive and full body cover," he added. 51% of the total claim amount paid in 2023 for the four main benefits highlighted above was paid under living benefits.

On average, the industry pays about 22% in living benefits, while Discovery Life tends to pay a higher proportion for illness, disability, and loss of income claims. This is because clients are rewarded with richer Shared-value benefits when they add more of these ancillary benefits. This in turn also assists clients in reducing their disability and income insurance gap.

Friedlander adds, "our 2023 claims experience shows that one in five life cover claimants had already claimed for a life changing illness or disability before they passed away."

The Shared-Value Insurance model continues to assist clients in a tough economic environment

Discovery Life's Shared-value payouts increased by 11% in 2023 to R2.1bn, totalling R14.3bn over 24 years, reflecting Discovery Life's commitment to making people healthier, while enhancing and protecting their lives. The value that our clients received through the Shared-value model over the years, including 2023, are:

  • Over R11.8bn in PayBacks to date (and R1.4bn in 2023), rewarding clients for managing their health and wellness.
  • R2.5bn in Cash Conversions pay-outs to date (and R714 million in 2023), supplementing our clients retirement funding by paying as much as 100% of their life cover to them in retirement, with no impact on their cover. Based on the current Vitality engagement levels, Discovery Life expects to pay an additional R8.1 billion in Cash Conversion benefits over the next five years.
  • R1.9bn in premium savings in 2023 through integration with other Discovery products, with upfront monthly premium discounts of up to 48%.
  • R2.9bn expected to fund tertiary education for current Global Education Protector clients, through the University Funder Benefit.

Discovery Life's Shared-value payments are now growing faster than the claims pay-outs, Friedlander points out. "This is a paradigm shift from the traditional insurance model as clients are deriving significant value from their life policies through healthy behaviour whilst being comprehensively protected for bad times."

The rich incentives provided through the Shared-value model motivate clients to engage in healthy behaviours. Discovery Life clients who engage in the Vitality programme experience reduced mortality rates. Vitality Gold and Diamond clients have reduced their mortality rates by 57% for instance, compared to those who are not engaged.

Discovery Life utilises proactive claims to help clients claim

"We noticed that clients can be unaware that they have a valid claim or are not thinking of claiming whilst going through life changing events, which are incredibly stressful times. One of our unique capabilities through our link with our Health business allows us to identify possible claims for clients who are members of Discovery Health Medical Scheme which helps to accelerate the claims process for them," says Friedlander.

Prompted by medical diagnoses, Discovery Life kickstarts the claim process and proactively reaches out to clients for any supporting documentation, leading to the payment of claims earlier and more efficiently – and in some cases, paying claims that may otherwise have gone unclaimed.

"In 2023, we paid 99.2% of all claims, with less than 0.8% of claims repudiated. Approximately 0.5% of this was due to non-disclosure, 0.2% for misrepresentation and 0.1% for fraud. Our exemplary claims track record is testament to our promise to our clients and confirms that we are there for our clients in all moments of their lives, with high quality cover," adds Friedlander.

Protecting for the costs of education

Claims under Discovery Life's Global Education Protector have been steadily increasing with R69 million paid towards education costs in 2023, up almost 30% from the prior year. This increase is because of a higher education inflation index coupled with an increase in the number of claimants. This shows the importance of having a product that indemnifies the cost of education whilst tracking education inflation, which is expected to be higher than consumer inflation each year.

Global life coverage

Discovery Life uses rich data to understand and develop products that address the emerging trends in consumers' life insurance needs. This has led to increased global coverage in its product offering, including higher severe illness cover amounts to enable clients who might need treatment outside of South Africa.

Additionally, the company's offshore life insurance option, the Dollar Life Plan, has paid out over $28 million since 2017.

"Global coverage has become increasingly important to clients – we are global citizens. People are more mobile than they previously have been with families and businesses across continents. We are proud to have developed products that are geared to protect our clients wherever they might find themselves," concludes Friedlander.

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