After a staggering increase of R24.9 billion in claims from COVID, South African life insurers are faced with little option but to implement a premium hike on policies for the unvaccinated. Death rates among unvaccinated people could remain elevated even as the pandemic eases, despite the lower severity of Omicron.
The Association for Savings and Investment SA (Asisa) provided death claims data from 1 April 2021 to 30 September 2021, a period which covered the third COVID wave (May to September). Compared to the same pre-pandemic period in 2019, there was a 53% surge in claims was reported, with a more than doubling of value of death claims. There were 565 522 claims, totalling R44.42 billion, compared to the pre-pandemic period’s 369 892 claims of R19.53 billion.
Though deaths were greatly reduced in the fourth wave, with Asisa acknowledging “anecdotal evidence” showing reduced severity from the Omicron variant, there was still “overwhelming evidence” that COVID mortality risks are far higher for the unvaccinated. Asisa’s data reflects that of the South African Medical Research Council (SAMRC), which shows a huge increase in the number of excess deaths over that period.
This information comes as the government debates easing lockdown measures even as various institutions warn of an impending fifth wave, which according to Absa bank could come as early as next month. However, Absa noted that its life claims were much reduced over the fourth wave as compared to the third, and therefore expects the fifth wave to be less severe.
Hennie de Villiers, the deputy chair of Asisa’s life and risk board committee, said that the importance of life insurance cover had been clearly demonstrated. “The reality is that most of us know at least one person who lost his or her life due to COVID. We also know of many more people who lost their income during the pandemic, highlighting the importance of having access to savings.”
He cautioned that, “While the death rate has been lower during the fourth wave than in previous waves due to vaccinations and the emergence of the Omicron variant, death claims rates have not yet returned to pre-pandemic levels. Also, less than 50% of our adult population has been vaccinated.
“There is overwhelming evidence that the risk of severe illness or death is significantly lower in those who are fully vaccinated.”
He added in a later statement that if the situation does not change and vaccinations are not embraced by the country, insurers may have “little choice but to adjust premiums in line with the higher risk presented by someone who is not vaccinated and therefore more likely to die from COVID”.
De Villiers said a “staggering” 1.59-million death claims were received in the 18 months from 1 April 2020 to 30 September, with life insurers paying out benefits of R92 billion.
Group life insurance premiums have already increased for the unvaccinated, De Villiers pointed out. Employers with mandatory vaccination policies are meanwhile benefitting from preferential rates.
When unvaccinated status is combined with age and comorbidities, premium increases, this resulted in premium increases of as much as 100% and in some cases coverage was even declined.
Source: Business Live
