SOUTH African life insurers paid 99.3 percent of all claims against fully underwritten individual life policies last year, amounting to R20.6 billion, the Association for Savings and Investment South Africa (Asisa) said yesterday.
Asisa said the 2020 annual death claims statistics for fully underwritten individual life policies, released this week, showed that life insurers received 32 072 claims, of which 31 853 were paid.
Only 219 claims were declined for reasons that included dishonesty, fraud, or contractual exclusions like suicide within the first two years from when the policy was taken out.
Asisa and its members have been publishing the rate at which claims against fully underwritten life policies were paid since 2012 to provide consumers with the peace of mind that valid claims were paid.
Asisa Life and Risk Board Committee deputy chairperson Hennie de Villiers said despite receiving a higher number of claims last year due to the pandemic, the number of claims declined was lower than in the previous year before Covid-19. In 2019, life insurers declined 243 claims compared to the 219 claims declined in 2020.
He explains that most claims were rejected by life insurers due to non-disclosure of material information, which involved an act of dishonesty on the part of policyholders.
In September, Asisa said that despite the unprecedented claims and benefit payments made to policyholders and beneficiaries as a result of the Covid-19 pandemic, the life industry remained in robust financial health and well capitalised to honour the long-term contractual promises made to customers.
Its half-yearly long-term insurance statistics, released in September and reported by Asisa members, showed that the life insurance industry held assets of R3.43 trillion at the end of June this year, while liabilities amounted to R3.09 trillion.
This had left the industry with free assets of R334.6 billion, which was almost double the reserve buffer required by the Solvency Capital Requirements.
BUSINESS REPORT ONLINE