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Overwhelmed by Covid-19 death claims, insurers plead for faster inoculation

Momentum CEO Hillie Meyer is worrid that if inoculation doesn't happen fast enough, SA will be at the risk of a 4th wave.

Momentum CEO Hillie Meyer is worrid that if inoculation doesn’t happen fast enough, SA will be at the risk of a 4th wave.

  • Three of the country’s big insurers – Discovery, Momentum Metropolitan Holdings, and Liberty – have published their death claims statistics.
  • Their numbers show that the second wave was more severe among the working population.
  • The Momentum CEO says if SA is caught napping again when the new vaccines come on stream, the country will be at risk of a fourth wave.

“We need to do the rollout of the vaccine faster. Plans that talk about a 12 and even an 18-month rollout won’t work. We need to do 10 million inoculations per month,” pleaded Momentum Metropolitan Holdings CEO after the announcement of the company’s financial results on Thursday.

Having witnessed a never-seen-before spike in death claims across MMH’s operations, CEO Hillier Meyer said SA cannot afford to be “caught napping” again when the other 10 Covid-19 vaccines that are in the final phase of development become ready for procurement.

In Meyer’s ideal world, SA would get 40 million people vaccinated by the end of September, and he does not see why this goal cannot be attained. Medical aids, big businesses, and a host of other stakeholders stand willing to help government procure vaccines, he said.

Meyer and his industry colleagues are among those who would like to see the 40 million people needed to achieve herd immunity in SA vaccinated yesterday.

The life insurance sector is collectively losing millions in death claims. It is also losing billions from people who are cashing out their retirement savings and investments to survive.

Deaths overwhelm insurers

If the third wave becomes as severe as the second wave, or if inoculation is rolled out at snail’s pace, that puts the country at the risk of a fourth wave – insurers will fork out billions of rands to bereaved families. But more importantly, watching death numbers dial-up is becoming unbearable, said Meyer.

“At least if we get enough people vaccinated by the end of September, then we’ll deal with the fourth wave. The third wave, we are not even going to dodge that bullet,” said Meyer.

In Braamfontein, Liberty Corporate’s managing executive, Tiaan Kotze, said deaths in 2020 had employees’ heads spinning. At one stage, Liberty Corporate’s teams that process funeral claims were working up until midnight on Saturday nights.

“It was hectic,” said Kotze.

He said even though it became common knowledge in February 2020 that a novel virus was firmly around, the insurance industry did not comprehend how big the impact would be.

In 2020, Liberty paid out R11.7 billion in death and disability claims. About R800 million of this was for Covid-19 related deaths, said the group’s Financial Director Yuresh Maharaj.

Discovery said it recorded 5 711 deaths across its health, life, and VitalityLife businesses in the six months to December 2020. The insurer said the second wave hit its clients particularly harder than the first wave.

Working popular hit the hardest in the second wave

MMH’s Meyer said the second wave hit the working population particularly hard.

During the first wave, death statistics were biased towards the elderly. In the second wave, Momentum Corporate – the division that provides employee benefits – recorded a 35% spike in death claims than it normally does.

Death claims for people aged between 40 and 70 were nearly 50% higher. The business recorded a mortality loss of about R500 million, said Meyer.

The retail clients of Momentum and Metropolitan were also hit hard. MMH said the average number of excess deaths for the retail life businesses was approximately 20% higher than comparable periods.

“In January, our claims were something else. January was the worst month so far. February was also quite bad, to be honest. And after the second wave, even though things bottomed out, the number of claims never dropped to the pre-Covid-19 levels,” said Meyer.

MMH’s results presentation showed that between its retail life businesses and Momentum Corporate, death claims hovered at around 8 000 per month after the peak of the first wave, but shot up dramatically to around 15 000 in January. These included funeral and life cover claims.

Liberty’s Kotze said during the early days of lockdown, the industry experienced muted levels of death and disability, because there were fewer accidental deaths.

But at the peak of the first wave, around the end of July to the first week of August, Liberty Corporate was paying out up to 300% more death claims per day than usual, for several weeks on end.

Post that peak, deaths started to bottom out between September and November. But the level of claims was still higher than normal.

During the second wave, the number of death claims became twice as high as they were during the first wave. When people started returning to work in January 2021, death claims went through the roof, said Kotze.

“Now I’m talking about the Liberty experience, but when I speak to colleagues in the industry, it’s the same all over,” he said.

Kotze added that while the insurer could not differentiate between Covid-19 and non-Covid-19 cases since most death certificates cite natural deaths, the company “definitely” experienced excess deaths, particularly among employed people.  

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