Discovery Life has released its 2024 claims experience report, announcing total payouts of R11.5bn to clients. This includes R6.85bn in individual life insurance claims, R2.4bn in Shared-value rewards for healthy behaviour, and R2.3bn in Group Risk claims.
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Pexels. Vitality, Discovery’s behaviour-based programme, saw R1bn Cash Conversion payouts.
The R6.85bn paid to individual life insurance clients is made up of:
Life cover claims: R3.4bn.
Living benefit claims: R1.5bn for the Severe Illness Benefit; R933m for the Capital Disability Benefit; and R673m for the Income Continuation Benefit.
Additional benefits: over R260m for the Global Education Protector, funeral policies and other benefits.
Discovery Life’s head of Claims Sylvia Steyn explains, “In 2024, we paid 99.3% of all claims. Within the remaining 0.7%, 0.4% of claims were repudiated for non-disclosure, 0.2% for misrepresentation, and 0.1% for fraud. This entrenches our track record of paying claims and supporting our clients when they most need their cover.”
Discovery Life also paid R2.4bn in Shared-value benefits, comprising R1.4bn in PayBacks, and R1bn in cash conversions. These are financial rewards based on how well clients managed their health and finances.
“I’m proud to say that 2024 was the first time Cash Conversion payouts reached the one-billion mark in a single year,” highlights Discovery Life deputy chief executive officer, Gareth Friedlander.
“This is powered by clients’ engagement in Vitality – Discovery’s behaviour-based programme that incentivises healthy living. Our latest claims experience also revealed that clients who reached a Gold or Diamond status experienced a 57% lower mortality risk and a 47% lower disability risk, compared to clients who were not part of or did not engage in Vitality. This lowered risk creates previously untapped value that we can return to clients to incentivise them to engage in healthy behaviours.”
Most payouts go to living clients
The payouts outlined above mean that Discovery Life pays more through living benefits (R3.1bn) and Shared-value rewards (R2.4bn) than for mortality claims (R3.4bn). “By comparison, the industry pays about 20-30% in living benefits, while Discovery Life is paying out over 60% to clients who are still alive,” adds Friedlander.
Cancer dominates; screening boosts early-stage claims
The 2024 claims data shows that cancer was the highest cause of death for women (35%). It was also the most common severe illness for both women and men (51% and 37% respectively), and the most common cause of disability among both women and men (34% and 30% respectively).
The Discovery Group invests significantly in encouraging and supporting clients to carry out regular health screening. Compared to 2020, the 2024 data shows significant increases in screening for common cancers, with mammograms up 14%, colorectal cancer screening 29% higher and 19% more prostate exams, all of which are hitting all-time highs.
Thanks to the increase in screening rates, there has been a 62% increase in early-stage cancer claims compared to 2020’s claims on illness cover.
“As a proportion of all cancer claims, lower severity claims continue to have an upward trajectory, showing that these cancers continue to be detected earlier. While Stage 3 and 4 cancers have remained relatively stable over that time, it’s in the disability claims for Stage 4 cancers where we’re seeing incredible benefits of screening, with those claims dropping 16% since last year,” says Dr Maritha van der Walt, chief medical officer for Discovery Life.
Early detection remains key to better outcomes. Data from the Discovery Vitality HealthyFutures model and the US-based Surveillance, Epidemiology, and End Results Program (known as SEER), shows that, on average, someone diagnosed with early-stage breast cancer can expect a 96% five-year survival rate. SEER also found that men who are diagnosed with localised prostate cancer have a 99% five-year survival rate.
One in five deaths unnatural
Cancer- and heart and artery conditions were prominent in life-cover claims for older age groups. However, looking at causes of death across all age groups, the 2024 data shows deaths occurred for a number of reasons.
One in five death claims were due to unnatural causes, with the largest component attributed to suicide at a staggering 35%, followed by motor vehicle accidents at 23%.
The high proportion of unnatural deaths highlights the need for comprehensive life cover for everyone, irrespective of underlying health status or age. “The data also emphasises the importance of taking mental-health concerns seriously, as well as fostering a culture of better driving on South African roads.
"I’d like to add that the Discovery Health Medical Scheme’s Mental Health Care Programme and Discovery Insure’s Vitality Drive programme actively help to address these issues, respectively,” points out Van der Walt.
Severe illness cover crucial for older ages
In 2024, Discovery Life paid out a total of R1.54bn for 2,900 severe illness claims. Of this, R275m was paid out in second or subsequent claims, with nearly one in three making their third or subsequent illness claim, and some having claimed over 10 times.
Additionally, Discovery Life paid out R128m in Converted Severe Illness claims - where a client’s disability cover expires and automatically converts to illness cover. “Illness cover and features like our automatic disability benefit conversion are crucial to ensuring clients have illness protection at older ages. This is very relevant, considering that 28% of severe illness claims are made by clients over 60. Ten years ago, this age group accounted for 11% of our illness claims and five years ago it was 20%.
“While it is natural for claims attributable to this age group to increase as our clients get older, this trend is increasing faster than we’d expect and shows the importance of illness protection at older ages – cover that isn’t always accessible or financially viable at those ages, so it is crucial to get this form of cover when you’re young,” notes Friedlander.
Offshore protection in US dollars
Recent geopolitical volatility has highlighted the value of offshore risk protection in diversifying clients’ cover - similar to how they might diversify their investments. This approach can provide a hedge against external events that affect exchange rates and also protect against potential future costs and liabilities that move in line with global markets.
Discovery Life’s Dollar Life Plan pays out claims in US dollars, to provide this sort of risk cover diversification. Since 2014, it has paid out over $34m in claims, with these payouts worth an extra 19% as they are denominated in US dollars.
