Discovery Life Payouts Decrease to R11bn as Covid-19 Effects Linger

Discovery Life, a prominent life insurer, experienced a decrease in payouts to the tune of R11 billion in 2022, compared to a record-high payout of R12 billion in the previous year. The decline in payouts can be attributed to the diminishing impact of the Covid-19 pandemic. However, the long-term effects of the pandemic continue to linger, as evidenced by an increase in claims related to severe illnesses, capital disability, and income protection.

While insurance claims related to Covid-19 deaths have declined, Discovery Life observed a 16% rise in payouts for severe illnesses and a 38% increase for disability claims. Additionally, claims for income protection rose by 6%. The insurer disclosed that it paid a total of R626 million for Covid-19 related individual life claims in 2022. These payout trends align with those reported by Liberty, another life insurer, indicating that although the worst of the pandemic has subsided, secondary effects are emerging, such as the resurgence of cancer-related conditions.

Gareth Friedlander, the Deputy CEO of Discovery Life, stated that the company is currently processing more claims for living benefits than for life cover. He highlighted the risk associated with long-Covid, stating that while it remains incompletely understood, it is expected to persist in the foreseeable future. The reduced frequency of health screenings during the pandemic has resulted in delayed diagnoses and more severe cases being observed in severe illness claims, according to the insurer.

Dr. Maritha Van Der Walt, Chief Medical Officer at Discovery Life, revealed that 47% of the insurer’s severe illness cancer claims were from individuals who had previously undergone health check screenings. The decrease in screening during the pandemic has had an impact on the detection of cancer, leading to diagnoses at later stages. This underscores the importance of regular screenings for early detection and treatment.

With the return to pre-pandemic conditions and behaviors, Discovery Life has observed a rise in life claims due to unnatural causes. Motor vehicle accidents accounted for 30% of all claims, followed by other accidents (30%), suicides (24%), and crime-related events (15%). Friedlander attributed this increase to people resuming their pre-Covid-19 activities and lifestyles.

As the world adapts to the ongoing challenges posed by the pandemic, life insurers like Discovery Life are navigating the evolving landscape of claims. While Covid-19-related claims have decreased, the repercussions of the pandemic continue to manifest in the form of higher severity diagnoses, delayed screenings, and shifts in the types of claims being filed. By closely monitoring these trends and adapting their policies and procedures, insurers can continue to provide comprehensive coverage to their policyholders.