‘Closest thing to black swan event’

Londiwe Buthelezi - "We were not prepared for what was coming," said Momentum's head of claims, Nirusha Naidoo as she was about to unpack the chaos, devastation, and destruction of families in 2021 that the insurer had never seen before.

Momentum paid record claims of R8.97 billion in 2021.

Jenny Ingram, the head of product development at Momentum, said it was the closest thing to a black swan event. Momentum's flagship insurance product, Myriad, recorded a 77% spike in claims compared to 2020, which was already an eventful year.

"If you crunch the numbers a little bit, it comes down to about R5 million every working hour that was paid out in 2021," said Ingram.

The third Covid-19 wave was the most devastating. Momentum went from paying R339 million and R1 billion in the first and second waves respectively to R2.5 billion in Covid-19 related death claims in the third wave. In total, Covid-19 deaths accounted for R4 billion out of the R8.97 billion payouts in 2021.

Thankfully, as more people got vaccinated against the virus, Covid-19 related death claims came down significantly to around R49 million during the fourth wave.

DEVASTATION

Naidoo said while the numbers were already eye-popping, it was the devastation caused by Covid-19 that struck her and her team the most.

They ran into situations where the policyholder passed away while the beneficiary's life was also hanging on a thread. And sometimes, they died at the same time.

She said the insurer was receiving letters from desperate spouses asking if their claims could be processed urgently because they had nothing. The only breadwinner in the house has passed on and children were starving.

"In some households, a father and a son passed away at the same time, or within relatively close periods of each other. So, you had got multiple breadwinners passing away at the same time," said Naidoo.

She said it was the first time that they saw a virus that just impacted families so severely and turned families upside down as Covid-19 did.

Momentum found that Covid-19 continued to affect men more than women. The split of its Covid-19 death claims was almost 70/30, with 72% paid to male clients and 28% to women.

It also noticed that the virus had more severe complications for people with a BMI of above 28.

"The research and the theory around that would be that people with a higher BMI often have comorbidities. So, being in that obese range, you're looking at [comorbidities like] hypertension, high cholesterol, diabetes. And that does play a role in how sick you got," explained Naidoo.

BIGGEST CLAIMS

Last year didn't only break records in the quantum of claims the insurer paid out. It also broke the records of the biggest claim paid to one person. Previously, the biggest claim to one person in the insurer's records was paid in 2020 – a R70 million payout to someone who died because of Covid-19.

In 2021, the biggest claim was R86 million paid to a client who died by suicide. The second-biggest claim was R84 million due to a helicopter crash. The third and fourth claims were also in excess of R60 million each, both related to Covid-19 deaths.

Momentum's head of business development, George Kolbe, said while 2021 was still a year of Covid-19, like Liberty, Momentum is also worried about the rise in serious cancer claims.

THE BIG C

Kolbe said what happened during the lockdown was that routine medical check-ups and necessary examinations fell by the wayside. So, the insurer was sort of expecting to see an uptick in cancer claims in future.

Ingram said on disability claims, Momentum usually sees strokes as the leading cause. But 2021 was the first year where cancer was the main reason for disability claims.

"That's quite unusual for that particular product because if you think about when cancer renders one disabled; it's typically when it's quite serious at stage three, or four," said Ingram.

This meant that claimants were diagnosed quite late. So, while strokes and heart attack claims declined, cancer cases for both males and females went up by 30%.

The other emerging top cause of disability claims was mental illnesses. Psychiatric claims for females rose to about 20% more than the levels Momentum recorded before the pandemic.

"So, something is changing. Maybe it's easier for people to work at home, maybe there's more flexibility. But I think time will tell what the long-term effect will be," said Ingram. – Fin24