Discovery Life payouts decrease to R11bn, but Covid-19 effects linger

Discovery Life paid out R11 billion in claims to members of its individual and group life schemes in 2022 – down from a record R12 billion payout in the previous year.

Claims were still dominated by the impacts of the Covid-19 pandemic in 2021.

The latest payouts were mostly to individual and group life-insured members who received R9.1 billion in claims, while R1.9 billion was paid in pay back and cash conversion payments to clients for managing their health and wellness.

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Despite the pandemic having phased out and hitting the endemic stage, the long-term impacts of the Covid-19 pandemic still linger, evidenced by a rise in claims for living benefits related to severe illnesses, capital disability as well as income protection, the insurer said on Wednesday.

Payouts 

While Covid-19 death related insurance claims have declined, payouts for severe illnesses and disability increased 16% and 38% respectively, said Discovery Life deputy chief executive Gareth Friedlander.

He added that income protection claims rose 6%.

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Discovery Life paid out a total of R626 million for Covid-19 related individual life claims in 2022 the company said.

The reduction in payouts for Covid-19 related claims is much in line with competitor life insurer Liberty, which also said while the worst of the pandemic is over, there were secondary effects emerging such as the re-emergence of cancer-related conditions.

“We are now processing more claims for living benefits than for life cover. Long-Covid isn’t entirely understood but the risk is expected to continue for the foreseeable future,” Friedlander said.

The insurer also noted a decrease in health screenings during the pandemic, which it now says is resulting in late and higher severity diagnosis in severe illness claims.

Cancer claims

Discovery Life chief medical officer, Dr Maritha Van Der Walt, said 47% of the insurer’s severe illness cancer claims are for those where health check screenings are already an established practice.

“Cancer has always been high on the list of reasons for severe illness claims. Now, after the reduction in screening during the pandemic, we’re seeing the impact of late-stage diagnoses,” Van Der Walt added.

In the wake of the return to pre-pandemic conditions and behaviours, life claims due to unnatural conditions have risen – motor vehicle related claims made up 30% of all claims, followed by other accidents (30%), suicide (24%), and crime related events (15%).

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“As we move beyond the pandemic people are starting to really live their lives again and move back into pre-Covid-19 kinds of activity,”  Friedlander said.

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