Loading...
News Updates:



Liberty pays R9.14 billion in insurance claims in 2023

Liberty pays R9.14 billion in insurance claims in 2023
21-05-24 / Kwanele Sibanda

Liberty pays R9.14 billion in insurance claims in 2023

Johannesburg - As one of the largest writers of life insurance with a strong historic market share, Liberty, within the insurance and asset management (IAM) division of the Standard Bank Group, has proven its commitment to protecting its clients against life’s uncertainties.

Liberty individual clients

In 2023, Liberty paid out R6.72 billion in valid claims to individual clients, their families, and beneficiaries. This amounts to R25.85 million every working day. Although this is 3.72% lower than in 2022, these statistics still mirror concerning trends in health and lifestyle risks facing South Africans.

The top five claim conditions in 2023 were spread across cancer, cardiac and cardiovascular diseases and disorders, respiratory disorders, strokes, and traumatic injuries. Cancer remains the leading cause of claims, accounting for approximately 32.3% of all our claims.

Living claims on the rise and dominated by cancer diagnoses

In 2023, under the lifestyle protection pillar of benefits, which covers the risk of a critical illness diagnosis, Liberty saw a 10.8% increase in total claims paid compared to 2022. The total paid in 2023 amounted to some R1.01 billion.

Considering lifestyle protection claims alone, women had a higher proportion of claims attributed to cancer compared to men, with 37.3% of female claims attributable to cancer, compared to 29.8% for men.

Cardiovascular disorders made up 23.4% of all lifestyle protection claims, followed by respiratory disorders at 7.3%, strokes at 5.6%, and traumatic injuries at 4.5%.

Overall, the insurer saw an increase in cancer and cardiovascular claims but a decrease in respiratory disorders, which may be considered a slight return to pre-pandemic norms, specifically in critical illness claims. The rise in critical illness-related claims aligns with research showing the global healthcare challenge of an increase in non-communicable diseases over the last 20 years.

Delivering on our promise to pay all valid claims

“A claim means that there is a vulnerable moment in the life of a client or one of their family members. While we deliver on our promise to pay every valid claim, we are also aware of the effects of the increase in lifestyle diseases such as cancer, proving the very essence of insurance, which is to provide some financial safety in difficult moments,” says Mark Barberini, Liberty’s Head of Comprehensive Life Solutions.

Barberini agrees that people in the current economic environment are looking for ways to streamline their finances when their budget gets stretched. However, he encourages South Africans to speak to their Financial Advisers and try to find the best way to remain insured to protect against further setbacks. An unexpected diagnosis can have a huge knock-on effect on your finances, exacerbated if you no longer have the necessary cover in place.

According to Tom Crotty, Liberty’s Head of Risk Technical Marketing, the claims point to people living through and surviving critical illness diagnoses.

By far, the most prevalent form of cancer was breast cancer, which accounted for 25.6% of all claims and 54.2% of all cancer-related claims for women. Considering cancer claims for men, 34.7% of all cancer claims were related to prostate cancer.

Interestingly, breast cancer in South African women remains higher than the global average, and breast cancer survival rates in South Africa are relatively low compared to countries like the US and the UK.

“People are surviving challenging, life-changing critical illnesses, which require lifestyle adjustments that can cost hundreds of thousands during their recovery phase,” says Crotty.

Mental health still a serious scourge

In previous years, Liberty saw a steady rise in the proportion of income protection claims related to mental disorders and a notable spike in suicide claims over our claims in 2021. Mental illness-related claims in 2023 appeared to have stabilised; however, suicides still make up the majority of these types of claims at 58%. Notably, 40% of all suicides were based in Gauteng, SA’s economic capital.

In context, suicides made up 2.6% of all life protection claims, providing a payout on the individual's death. However, clients who were unable to work due to a debilitating mental illness such as depression and anxiety made up 6.9% of all income protection claims.

Dementia accounted for a further 12.5% of all mental disorder claims and is often a disease that clients don’t realise they can get cover for.

Liberty’s Medical Officer, Dr. Reinhardt Erasmus, says, “We have seen that increased claims for cancer have been a growing trend over the years, often backed up by parallel medical research. This could be attributed to a number of reasons such as lifestyle choices, our diets, lack of physical activity, and genetic markers. Given the increasing rate of cancer claims, we continue to encourage better health choices and regular medical check-ups because, with medical advancements, early detection can assist in mitigating these risks earlier.

“In addition, mental health continues to be a scourge the world over. There can be no doubt that insuring against the financial effects of a serious mental health condition remains an important consideration for any family. Undoubtedly, mental health remains a growing concern across the globe, and ensuring your financial protection portfolio extends to covering these types of conditions is no longer a nice-to-have form of cover. South Africans should make every effort to seek emotional, psychological, and social support when faced with challenges to help boost mental wellbeing,” says Erasmus.

“There can be no doubt that insuring against the financial effects of a serious mental health condition remains an important consideration for any family,” Erasmus adds.

Education claims

Over R40.455 million in claims were paid to assist children in meeting their education costs. The largest proportion of payouts in 2023 was to cover students in the secondary private school system. These claims are based on Liberty's EduCator policies, which provide cover for education globally, from daycare to primary and secondary schools, as well as a wide range of universities.

“Education payouts saw a significant increase from 2022, where R33.747 million was paid, a notable demonstration of the growing need for educational cover. Parents increasingly want the security of knowing that their children will benefit from an education in case something happens to them as the parent, and they are no longer able to cover the costs of their child’s education due to a critical illness, injury, or even death,” says Crotty.

Liberty corporate clients

Liberty Corporate Benefits paid out R2.4 billion in claims during the year in review to at least 10,950 clients, who, when faced with critical events in their lives, were able to claim against their corporate benefits.

For corporate claims during 2023, psychiatry and neurological disorders increased in prominence to rank among the top five claim causes, accounting for 12% of all corporate claims paid in 2023.

“Post-COVID, we think the stresses of the current economic environment may be taking a toll on our institutional clients,” says Sinethemba Khoabane, Head of Risk Product: Risk & Pricing, Liberty Corporate Benefits.

“The very essence of corporate benefits is to assist in times such as these and for employers to exercise great care in ensuring their employees' wellbeing.”

Approximately R888 million was paid out in income protection benefits, an increase of 10% compared to the previous year.

Financial and professional services were the industries with the most significant claims relating to income protection, at 34%. Musculoskeletal disorders, neurological disorders, and psychiatry continued to be the three largest contributors to income protection claims.

“Our value-added services that also offer trauma counselling for employees are an effort to help deal with psychological recovery caused by life events and other conditions,” adds Khoabane.

Transparency in claims

Liberty paid out 93.8% of all claims from its clients during the year. This means in total, 6.2% of claims were not paid because they did not meet the required criteria. Importantly, thanks to the knowledge and support of our partnered Financial Advisers at the time the policy is taken up, we have seen our declines for non-disclosure remain low. The total declines for non-disclosure of key client details made up 0.3% of all claims. Other factors that could lead to a claim being repudiated include exclusions or conditions not covered in the policy.

“Our accredited Financial Advisers are there to guide the client from the inception of the policy. Our claims management teams are continuously streamlining the claims process internally in order to deliver a superior experience for our clients.”

ADDLIB Cashbacks

In 2023, Liberty paid back R115 million in premiums to clients in cash lump sums under their ADDLIB cash back scheme, designed to reward loyalty and financial wellness. The single largest payment to an individual was R1.420 million.

Leave a Comment