Over R100m in COVID-19 related Group Risk claims paid out by Discovery
In a claim experience analysis, Discovery Group Risk today reported claim pay-outs to the value of R1.48 billion in the year to June 2020, including at least R100m directly due to COVID-19. The company offers group risk benefits that include life cover, global cover for the education of employees' children, severe illness cover, lump-sum and monthly disability protection, and funeral cover.
“2020 has been a stressful year for employers across the board, particularly for decision makers seeking to protect their employees and their families against financial difficulty,” Guy Chennells, Head of Product for Discovery Employee Benefits said.
“We have seen the high value our clients place on these benefits as almost all our clients continued to prioritise maintaining cover during this period of financial difficulty. Many of our pension and provident fund clients took payment holidays to ease cashflow pressure, but wisely continued to pay for our comprehensive risk cover all the way through,” Chennells added.
“This is a time where, as a life insurer, we can really demonstrate our role in society. A pandemic brings claims payment into the spotlight; but the reality is that we are there for people through their life crises day in and day out. On average, we pay out a claim every 80 minutes, and to date, Discovery Group Risk has paid out 48 800 claims to the value of R10.2 billion in total.”
Snapshot of claim payments for the 2020 financial year
A total of 6 533 claims were paid out in 2020. These included:
- R741m in Life Cover Benefit
- R522m Income Continuation Benefit
- R105m paid out under the Severe Illness Benefit
- R42m Capital Disability Benefit
- R31m in Funeral Cover Benefit
- R27m Global Education Protector
Discovery’s data also revealed the following:
At least 79 Group Risk claims related to COVID-19, with the trend following the national trend through our first wave. To date R9.5 million has been the highest COVID-19 related pay-out.
The largest single pay-out under the life cover benefit (all causes of death included) was R18 million.
85% of causes of death were natural, with an average age of 47.
Almost one in five death claims were due to unnatural causes, which affect clients no matter their age or underlying health. In this category, the average age was 40.
The most common cause of death for males was due to unnatural causes, such as motor vehicle accidents. Males are 2.3 times more likely to die of unnatural deaths than females.
Through the Global Education Protector benefit, Discovery Group Risk is currently funding the education costs of 1 410 children in 2020. Chennells adds that almost half of all children covered under the Global Education Protector benefit will have their entire schooling career funded through the benefit, and children can be upgraded to private schools if the member had a Bronze or higher status on Vitality. In total to date, R186 million in education fees has been funded.
The largest number of claims received within the year was from Discovery’s Income Continuation Benefit. In this category, people younger than 40 mostly claimed for nervous system conditions (these include strokes), musculoskeletal disorder was the most common reason to claim for people aged 40 to 60, and cancer was the main cause of disability for people older than 60.
Cancer is also the main reason both males and females claim from the Severe Illness Benefit, making up 48% of all claims. The largest single claim pay-out was for colon cancer. Discovery received four times more claims for heart and artery conditions for males (21%) than females (5%).
The highest number of severe illness claims was from the 31 to 40 age group. However, the highest total value of claims was within the 51 to 60 age band as these individuals’ claims were of a higher severity than that of younger members.
Boosting retirement benefits by reinvesting payback rewards
The total of R1.48 billion in group risk claims paid out in 2020 also includes payback rewards – a unique benefit offered through integration with Discovery Vitality.
Chennells explains how it works, saying: “Discovery’s core purpose is to make people healthier and enhance and protect people’s lives, and we achieve this through a Shared-value Insurance model across all our businesses. By using Vitality’s behavioural change programme within our Employee Benefits offering, we incentivise employees to engage in healthy behaviours, and then reward them with Group Risk premium paybacks.”
For example, if a client’s employees sign up with Vitality, each employee can earn a payback percentage according to their Vitality status and Discovery Health claims, where applicable. Employees can improve their status the more they engage with the programme. As a result, they can accrue a higher percentage of their premiums towards a payback amount. For employees without Vitality, simply doing an annual Vitality Health Check is measured instead. In this way, client’s employees are encouraged towards goals of long-term health and reduced overall risk. The lower a person’s risk profile, the higher the payback.
In addition, employees can boost their personal retirement savings by reinvesting these paybacks in Discovery Retirement Funds, says Chennells.
“The paybacks are worth double in the Retirement Fund. This enables our clients and their employees to derive real, long-lasting value from products that traditionally only provide risk protection. By writing Shared-value Insurance into the very structure of our products, we strive to help employers and employees in impactful ways, when they need it most.”
To download a copy of the Discovery Employee Benefit Claims Stats - click below...