Financial services provider First National Bank (FNB) says it paid out R2.571 billion on life insurance and other policies last year, with majority of payouts arising from death-related claims and the inability to earn an income.
The bulk – R2.3 billion – was allocated to death claims, R190 million to retrenchments and the inability to earn an income, and R81 million to disability claims.
It was a year that saw major insurance companies bracing for the worst in terms of mortality claims linked to the second and third waves of the pandemic.
JSE-listed insurance giant Sanlam paid out R4.75 billion in total via its Individual Life unit, Old Mutual had set aside over R2 billion to cover potential death claims, Momentum had allocated over R1.6 billion and Liberty had budgeted at least R1.2 billion.
“In times like these, it is critical to ensure that claims are paid out seamlessly to minimise financial pressure and anxiety for customers affected by unforeseen events,” says FNB Life CEO Lee Bromfield.
“FNB Life was founded with the primary aim of disrupting and changing the insurance landscape by promoting innovative and digitally-driven insurance solutions for the benefit of customers.”
Six years young
FNB Retail CEO Raj Makanjee adds: “Our life insurance business has been a significant part of our efforts to support customers in navigating the uncertainty of the pandemic.
“As a result, we take pride in our ability to pay out claims at this substantial scale, particularly because we integrated this insurance business into our offering only six years ago with the aim of helping customers in times of vulnerability.”
FNB says death-related insurance claims have subsided over the fourth wave, which arrived as the world and the country were stepping up vaccination rollout programmes.
The reopening of the economy thanks to the easing of lockdown restrictions also saw more people returning to work and increasing their potential to earn an income.
FNB claims to be the only insurance provider that pays out claims by routinely checking the National Population Registry for policyholders who are deceased.
“The pre-emptive claims process pays an average of R14.5 million per month to beneficiaries, with over R450 million paid-out to date,” it said in a statement.